Northrop's Strategy Gets It Done

The defense company projects full-year earnings that should top its earlier guidance.
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A sound quarter for defense contractors continued Thursday, as

Northrop Grumman

(NOC) - Get Report

said sales rose 7% from a year ago and projected full-year earnings that should exceed the company's previous guidance.

Second-quarter earnings from continuing operations rose to $366 million, or $1 a share, from $298 million, or 82 cents a share, for the same period of 2004. Sales climbed to $8.0 billion from $7.4 billion a year ago.

"Based on year-to-date results, we expect earnings per share growth of approximately 30% in 2005, reflecting our continuing focus on improving the performance of our businesses," Northrop said in a press release.

Contract acquisitions totaled $5.6 billion in the second quarter, while the company's overall backlog was $57.1 billion as of June 30.

Northrop continues to expect sales of $31 billion to $31.5 billion for 2005. Next year the company is anticipating sales of around $32 billion. Earnings from continuing operations for this year should reach $3.90 to $4 a share, vs. the prior guidance of $3.70 to $3.85, Northrop said.

For 2006, the company predicted earnings from continuing operations of $4.10 to $4.30 a share.

Analysts expected the Los Angeles-based military goods maker to earn 88 cents in the second quarter. The Thomson First Call consensus profit estimates are $3.83 for 2005 and $4.14 for 2006.

Shares of Northrop were gaining 36 cents to $57.06. Separately, fellow defense firm

Raytheon

(RTN) - Get Report

released its quarterly results Thursday, reporting a 10% increase in sales and raising its full-year guidance. Earlier this week,

Lockheed Martin

(LMT) - Get Report

also

offered positive numbers for the latest quarter.