Northrop Grumman Q3 Results Top Estimates; Lifts 2017 Outlook

(RTTNews) - Northrop Grumman Corp. (NOC) reported that its third quarter 2017 net earnings increased 7 percent to $645 million from $602 million in the prior year period. Third quarter 2017 earnings per share increased 10 percent to $3.68 from $3.35 in the third quarter of 2016. Analysts polled by Thomson Reuters expected the company to report earnings of $2.92 per share for the quarter. Analysts' estimates typically exclude special items.

Third quarter operating income increased 2 percent primarily due to higher net FAS/CAS pension adjustment and segment operating income, partially offset by increased unallocated corporate expenses. The $90 million increase in unallocated corporate expenses relative to the third quarter of 2016 includes $27 million for transaction costs related to the pending acquisition of Orbital ATK, which is currently expected to close in the first half of 2018.

The prior year period included a $30 million benefit recognized for state tax refunds claimed on our prior year tax returns and a $25 million benefit recognized for estimated prior year overhead claim recoveries.

Quarterly sales increased 6 percent to $6.53 billion from $6.16 billion in the third quarter of 2016. Wall Street expected revenues of $6.33 billion.

Third quarter 2017 sales increased 6 percent, primarily due to an 11 percent increase at Aerospace Systems.

The company raised its 2017 earnings per share guidance to a range of $12.90 - $13.10 from the prior outlook of $12.10 to $12.40 per share. The company now expects 2017 sales to be approximately $25.5 billion, compared to the prior outlook of low $25.00 billion. Wall Street currently is looking for fiscal year 2017 earnings of $12.55 per share on annual revenues of $25.38 billion.