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Highlights
- Northrop's third-quarter sales in its space unit jumped 22% to US$2.68 billion.
- The results prompted the defense contractor to raise its fiscal-year adjusted EPS.
- However, the Colorado-based company's total sales fell by 4% to US$8.72 billion in the quarter.
Defence equipment manufacturer Northrop Grumman Corp (NYSE:NOC) on Thursday posted a better-than-expected third-quarter profit of US$1.1 billion, helped by demand in its space unit.
The company earned US$6.63 per share, excluding items, which were above Wall Street estimates of US$5.99, Refinitiv data showed.
The results prompted the defense contractor to raise its fiscal-year adjusted EPS. It now expects adjusted EPS to be between US$25.20 and US$25.60 from the earlier forecast of US$24.40 and US$24.80, Reuters reported.
The company, however, said labor and supply issues remain a major concern. The Covid-19 pandemic has crippled the global supply chain, creating raw material shortages across sectors.
During the quarter, Northrop tested its new hypersonic weapon concept dubbed HAWC in collaboration with Raytheon Technologies.
Defense manufacturers are ramping up efforts to build next-gen hypersonic weapon systems. For example, Northrop's ramjet, fitted with Raytheon's missiles, can move five times the speed of sound.
Northrop's third-quarter sales in its space unit jumped 22% to US$2.68 billion.
However, the Denver, Colorado-based company's total sales fell by 4% to US$8.72 billion in the quarter. Analysts had estimated US$8.94 billion in sales.
In the same quarter of 2020, its total sales were US$9.1 billion.
However, its third-quarter organic sales were increased 3% to US$8.7 billion from US$8.5 billion a year ago. Its third-quarter net earnings rose 8% to US$1.1 billion, or US$6.63 per diluted share YoY. In the same quarter of 2020, its net earnings were US$1.0 billion, or US$5.89 per diluted share.
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Source: Pixabay
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Stock Performance
The NOC stock was down 6.61% to US$362.48 at 10:33 am ET on Thursday. The stock rose more than 22% year-to-date. Its 52-week highest and lowest prices were US$408.03 and US$282.88, respectively. In addition, the company’s P/E ratio is 13.13, the forward P/E one-year ratio is 15.58, and the EPS is US$27.71. Northrop Corp's current market cap is around US$58.23 billion.
Bottomline
The labour-intensive industrial sector has been one of the worst-hit industries from the Covid-19 pandemic. However, the US economy has made tremendous progress over the past few months, thanks to robust government monetary support and vaccinations. Investors, however, must exercise due diligence before foraying into stock trading.
