By Tess Stynes
Northrop Grumman Corp.'s (NOC) second-quarter earnings rose 1.7%
as the defense company posted modestly stronger revenue and
margins.
For the year, the company raised its per-share earnings estimate
to $7.60 to $7.80 on revenue of $24.3 billion, from its previous
estimate for per-share profit of $6.85 to $7.15 and sales of $24
billion.
The company, which builds unmanned aircraft such as the Global
Hawk and provides cybersecurity and logistics services, has been
streamlining operations for the past several years to cope with
leaner defense budgets.
Defense sector revenue remains under pressure from weaker
defense spending, which has been compounded by further U.S.
government spending cuts known as the sequester that went into
force during March. But so far, major defense firms appear to be
riding out the wave of weakened Pentagon spending.
Northrop Grumman reported a profit of $488 million, or $2.05 a
share, up from $480 million, or $1.88 a share, a year earlier.
Excluding pension-adjustment impacts and other items, adjusted
earnings from continuing operations were up at $1.97 from $1.79.
Revenue edged up 0.3% to $6.29 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of $1.71 on revenue of $5.98 billion.
Operating margin rose to 12.8% from 12.3%.
The company's aerospace systems and electronics systems
businesses posted sales growth of 9% and 2%, respectively.
Northrop's information systems sales fell 9% while technical
services revenue dropped 8%.
As of June 30, total backlog was $37.72 billion, compared with
$41.55 billion reported a year earlier and $39.4 billion in the
first quarter.
On Tuesday, Lockheed Martin Corp. (LMT) was the first major
defense contractor to report second-quarter earnings, which were up
10% amid stronger profits in its mission systems and missile
divisions, as well as a lower pension-accounting related charge.
The company also raised its 2013 earnings outlook.
Northrop shares closed Tuesday at $88.76 and were inactive
premarket. The stock is up 31% this year.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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