Free Post Earnings Research Report: Northrop Grumman’s Sales Jumped 5%; EPS Climbed 14%

LONDON, UK / ACCESSWIRE / May 11, 2018 / If you want access to our free earnings report on Northrop Grumman Corp. (NYSE: NOC), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=NOC. The Company reported its first quarter fiscal 2018 operating and financial results on April 25, 2018. The defence contractor outperformed top- and bottom-line expectations. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Earnings Highlights and Summary

For the first quarter of the fiscal year 2018, Northrop Grumman's sales increased 5% to $6.74 billion from $6.41 billion in the first quarter of 2017. The Company's revenue numbers topped analysts' estimates of $6.58 billion.

During Q1 2018, Northrop Grumman's segment operating income rose 3% to $762 million compared to $741 million in Q1 2017, due to higher sales. The Company's segment operating margin rate declined 30 basis points (bps) to 11.3%, due to a lower margin rate at its Aerospace Systems segment. For the reported quarter, Northrop Grumman's operating income and margin rate declined to $854 million and 12.7%, respectively, compared to $862 million and 13.4%, respectively, in the prior year's same period, primarily due to a $27 million decrease in net FAS (service)/CAS pension adjustment.

Northrop Grumman's effective tax rate declined to 15.2% in Q1 2018 from 17.5% in Q1 2017. The Company's lower tax rate reflected the benefits of the Tax Cuts and Jobs Act 2017 (TCJA), which reduced the federal statutory tax rate to 21% from 35%.

For Q1 2018, Northrop Grumman's net earnings increased 14% to $739 million, or $4.21 per diluted share, compared to $650 million, or $3.69 per diluted share, in Q2 FY17. The Company's earnings beat Wall Street's estimates of $3.63 per share.

Segment Results

During Q1 2018, Northrop Grumman's Aerospace Systems segment's sales jumped 10% to $3.28 billion compared to $2.98 billion in Q1 2017, principally due to higher Manned Aircraft sales. Higher volume for restricted activities and the F-35 and E-2D programs were the primary drivers of increased Manned Aircraft volume. The segment's operating income rose 6% to $341 million on a y-o-y basis and its operating margin rate declined 40 bps to 10.4% in Q1 2018, primarily due to a non-programmatic benefit recognized in Q1 2017 and higher volume on early phase development programs during FY18.

For Q1 2018, Northrop Grumman's Mission Systems segment's sales grew 3% to $2.88 billion compared to $2.80 billion in Q1 2017, principally due to higher volume for Sensors and Processing programs, partially offset by lower volume for Cyber and ISR programs. The segment's operating income gained 3% to $371 million on a y-o-y basis, consistent with higher sales, and its operating margin rate was marginally higher increasing by 10 bps to 12.9% during the reported quarter.

Northrop Grumman's Technology Services segment's sales fell 4% to $1.14 billion in Q1 2018 compared to $1.19 billion in Q1 2017, due to the completion in 2017 of several programs in System Modernization and Services and Advanced Defense Services. These declines were partially offset by higher volume on several Global Logistics and Modernization programs. The segment's operating income dropped 5% to $122 million on a y-o-y basis, and its operating margin rate was 10.75% in the reported quarter, down 10 bps compared to the year ago corresponding period.

Cash Matters

During Q1 2018, Northrop Grumman's cash used in operating activities totaled $237 million compared to $439 million in Q1 2017. After capital expenditure of $305 million, the Company's free cash flow was $542 million in the reported quarter.

Stock Performance Snapshot

May 10, 2018 - At Thursday's closing bell, Northrop Grumman's stock marginally dropped 0.36%, ending the trading session at $326.41.

Volume traded for the day: 1.22 million shares, which was above the 3-month average volume of 1.13 million shares.

Stock performance in the last three-month - up 0.74%; previous six-month period - up 7.62%; past twelve-month period - up 31.56%; and year-to-date - up 6.35%

After yesterday's close, Northrop Grumman's market cap was at $56.89 billion.

Price to Earnings (P/E) ratio was at 23.72.

The stock has a dividend yield of 1.35%.

The stock is part of the Industrial Goods sector, categorized under the Aerospace/Defense - Major Diversified industry. This sector was up 0.4% at the end of the session.

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