Northrop Grumman Raises 2014 Profit Forecast, Beats ViewsRichard Clough
Northrop Grumman Corp. raised its 2014 earnings forecast as the maker of Global Hawk drones beat analysts’ third-quarter profit estimates.
Annual earnings will be $9.40 to $9.50 a share, above the previous range of $9.15 to $9.35, the Falls Church, Virginia-based company said today in a statement. Northrop previously boosted its forecast in July.
Net income fell 4.8 percent to $473 million, or $2.26 a diluted share, the Falls Church, Virginia-based company said today in a statement. That exceeded the $2.13 average of analysts’ estimates compiled by Bloomberg.
A change in recoverable pension costs under the recently passed Highway and Transportation Funding Act of 2014 reduced third-quarter earnings by $62 million, or 30 cents a share, the company said.
Northrop, the fifth-largest U.S. government contractor, has generated a greater share of sales from its aerospace business since spinning off its shipbuilding operations in 2011. The company is vying with Lockheed Martin Corp. and other defense contractors for pieces of a shrinking pie as federal budget reductions contributed to the fourth consecutive annual decline in government contracting last year.
Northrop said last month it won a U.S. Air Force contract worth $354 million to deliver three additional RQ-4 Global Hawk aircraft. In August, the company said it was one of the contractors chosen by the U.S. Navy to upgrade cybersecurity and intelligence systems under a deal worth as much as $2.5 billion over eight years.
The shares gained 10 percent this year through yesterday, beating the 5 percent rise in the Standard & Poor’s 500 Index.
Military contractors have rallied in recent months on increasing global instability and the prospect for rising sales of missiles, drones and other weapons.
Sales decreased 2 percent in the quarter to $6 billion, beating analysts’ estimates of $5.9 billion.