Northrop Grumman 1Q Profit Soars on Lighter Expenses
Northrop Grumman (NYSE:NOC) toppled Wall Street estimates with a 21% improvement in first-quarter profit, led by tighter expenses that more than offset lower sales.
The Los Angeles-based defense contractor posted net income of $496 million, or $1.67 a share, compared with $410 million, or $1.34 a share, in the same quarter last year, ahead of average analyst estimates polled by Thomson Reuters of $1.56.
Revenue for the maker of aircraft systems was $6.7 billion, down from $6.9 billion a year ago, virtually matching the Street’s view of $6.74 billion.
Sales were impacted by the company’s reduced participation in the Nevada National Security Site joint venture and the U.S. government’s continuing resolution funding. They were led by growth in its aerospace unit, which climbed a modest 1% to $2.74 billion, partially offset by declines in all its other segments.
Cushioning the results were tighter expenses. Cost of sales and service revenues declined to $2.8 billion from $2.99 billion in the year-earlier period, while cost of service revenues slipped to $2.5 billion from $2.6 billion. General and administrative expenses declined by $56 million.
“This was a very productive quarter. We completed the shipbuilding spin-off and our newly aligned portfolio generated solid financial results,” Northrop CEO Wes Bush said in a statement. “In today’s challenging environment, our actions demonstrate our continued commitment to value creation through performance improvement, portfolio management and effective cash deployment.”
In light of the improved performance, the company raised its fiscal earnings view to the range of $6.50 to $6.70 a share. It also raised its quarterly dividend by 6.4% to 50 cents a share.