BETHESDA (dpa-AFX) - Defense contractor Northrop Grumman Corp. (NOC) Wednesday said profit for the first quarter increased significantly from the prior year, helped by some tax benefit, even as sales declined. Further, the company lifted its earnings forecast for the year.
Northrop Grumman's peer Lockheed Martin Corp. (LMT) reported Tuesday a profit for the first quarter that jumped 23 percent from last year, despite a sales drop. The company also raised its earnings guidance for full-year 2014, while maintaining annual revenue outlook.
Net earnings for Northrop Grumman increased to $579 million or $2.63 per share from $489 million or $2.03 per share in the first quarter of 2013.
The latest earnings included a $51 million or $0.23 per share tax benefit resulting from the partial resolution of the Internal Revenue Service examination of the company's 2007-2009 tax returns.
Pension-adjusted earnings per share were $2.31, while it totaled $1.94 last year.
On average, 20 analysts polled by Thomson Reuters expected earnings of $2.15 per share. Analysts estimates typically exclude special items.
Wes Bush, chairman, chief executive officer and president, said, 'First quarter results reflect another solid performance by our team and a good start to the year. Our sustained performance, coupled with share repurchases, drove higher earnings per share for the quarter.'
Operating costs and expenses declined, resulting in operating income of $845 million, up from last year's $759 million.
Total sales fell to $5.848 billion from $6.104 billion in the prior year. Analysts expected revenues of $5.84 billion.
For the Aerospace Systems, sales decreased 3 percent to $2.42 billion, due to lower volume for space and unmanned programs.
Electronic Systems' sales were 4.5 percent lower at $1.644 billion, amid lower volume for combat avionics and navigation and maritime systems programs, partially offset by growth in international programs.
In Information Systems, sales were 5.8 percent lower at $1.577 billion, due to lower volume across several programs including restricted programs and programs impacted by in-theater force reductions.
Technical Services' sales slid 3 percent to $697 million, primarily due to lower volume for integrated logistics and modernization programs.
Looking ahead, the company now expects earnings per share in the range of $8.90 to $9.15, compared to the previous forecast of $8.70 to $9.00. Revenues are still projected in the range of $23.5 billion to $23.8 billion. Analysts expect full year earnings of $8.93 per share on revenues of $23.72 billion.
The company expects operating margin of 13 percent, compared to the previous forecast of 12 percent.
NOC closed down 2 percent on Tuesday at $119.79.
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