Northrop Grumman Posts Better-Than-Expected 3Q Profit

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Northrop Grumman Corp. on Wednesday raised its full-year guidance, saying third quarter net income rose nearly 5 percent on higher sales of military equipment.

The Los Angeles defense contractor reported net income of $512 million ($1.51 per share) in the quarter ending Sept. 30, up from $489 million ($1.41) a year ago. The prior year’s quarter included an after-tax gain of $21 million due to a reorganization.

Revenue increased more than 6 percent to $8.38 billion. Excluding discontinued operations, the company earned $1.50 per share, better than the consensus of analysts surveyed by Thomson Reuters, which expected an adjusted profit of $1.42 per share on revenue of $8.19 billion.

Northrop raised its outlook for 2008 to a range of $5.10 to $5.20 per share up from its previous estimate of $4.90 to $5.15 per share. That’s in line with the analysts’ average of $5.13.

The company said it received $11.5 billion in new orders in the quarter. Though the Defense Department earlier this year reversed a $40 billion award to build aerial refueling tankers for the Air Force, Northrop last month won a $5.1 billion contract to build the U.S. Navy’s next-generation aircraft carrier. The Pentagon plans to reopen the tanker competition after the next president takes office.

As of June 30, Northrop’s total backlog reached a record $70.1 billion.

Northrop shares were up $1.22, or 3 percent, to $46.06 in morning trading on the New York Stock Exchange.

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