Northrop Grumman raises year's forecast as profit tops estimates
Northrop Grumman Corp., the maker of Global Hawk drones, topped analysts' profit estimates in the second quarter and boosted its full-year forecast.
Net income rose 4.7 percent to $511 million, or $2.37 a share, in the quarter, from $488 million, or $2.05 a share, a year earlier, the company said today in a statement. The average estimate of 20 analysts surveyed by Bloomberg was $2.22 a share.
Northrop, the fifth-largest U.S. government contractor, raised its full-year profit forecast to a range of $9.15 to $9.35 a share from $8.90 to $9.15 a share in April. It also affirmed its January sales estimates for the year of $23.5 billion to $23.8 billion.
Sales declined 4.1 percent to $6.04 billion. That beat estimates of $5.96 billion, according to 17 analysts surveyed by Bloomberg.
Northrop has risen 43 percent in the past 12 months through yesterday, compared with a 17 percent increase in the Standard & Poor's 500 Index.
Defense contractors' sales have been falling as the government slows spending and winds down the war in Afghanistan. Federal budget cuts last year contributed to the fourth consecutive annual decline in government contracting, the longest stretch since Ronald Reagan was president.
Some of Northrop's programs benefited in President Barack Obama's budget request for the year beginning Oct. 1.
Obama proposed keeping the Global Hawk drones and phasing out the U-2 spy plane. That reversed a previous Pentagon plan to cut spending by grounding the Global Hawk Block 30 in favor of Lockheed Martin Corp.'s U-2.
Northrop, based in Falls Church, Virginia, in June won 34 percent of the $40.9 billion in contracts announced by the Pentagon, including an award with a maximum value of $9.9 billion for maintenance on the B-2 stealth bomber.
Lockheed, the largest U.S. government contractor, yesterday reported sales and profit that beat analysts' estimates for the second-quarter. The company, based in Maryland, also lifted its full-year profit outlook.