Northrop Grumman Boosts Guidance After First-Quarter Earnings Beat

Northrop Grumman's strong earnings prompt the company to raise its full-year sales and earnings guidance.
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Northrop Grumman  (NOC) - Get Report posted a 153% jump in first-quarter earnings, prompting the aerospace and defense giant to boost its full-year sales and earnings guidance.

Shares of the Falls Church, Va., company were climbing 4.6% to $353.80 on Thursday.

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Northrop Grumman reported net earnings to $2.2 billion, or $13.43 a share, up from year-ago earnings of $868 million, or $5.15 a share. Adjusted earnings came to $6.57 a share, which beat analysts' estimates of $5.48 a share.

First-quarter net earnings reflect the IT services divestiture effective Jan. 30, including a net after-tax benefit of $1.1 billion, or $6.86 a share, the company said.

Northrop Grumman closed the sale of its IT services business to Peraton, an affiliate of Veritas Capital, for $3.4 billion in cash.

Sales in the quarter increased 6% to $9.2 billion, while analysts had been calling for sales of $8.5 billion.

The increase was a result of higher sales at space systems, mission systems and aeronautics systems. This was partially offset by lower sales at defense systems principally due to the impact of the IT services divestiture.

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First quarter net awards totaled $8.9 billion and backlog was $79.3 billion, the company said.

Looking ahead, the company said it expects to 2021 revenue to range from $35.3 billion to $35.7 billion compared with the prior guided range of $35.1 billion to $35.4 billion.

Northrop Grumman expects full-year earnings of $24 to $24.50 a share, up from earlier guidance of $21.80 to $22.20 a share. 

Analysts have been expecting earnings of $23.66 a share on sales of $35.5 billion.

"Our team booked competitive new awards and generated higher sales, earnings and cash," Kathy Warden, chairman, CEO and president, said in a statement. "These strong operational results, coupled with portfolio shaping, enabled value-creating capital deployment for our shareholders."

On Tuesday, aerospace and defense company Raytheon Technologies  (RTX) - Get Report reported first-quarter earnings that topped estimates and lifted its full-year guidance.

General Electric  (GE) - Get Report also posted stronger-than-expected first quarter earnings Tuesday.