Northrop Grumman Misses on Revenues but Beats on EPS

Northrop Grumman (NYS: NOC) reported earnings on Feb. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Northrop Grumman missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share expanded significantly.

Gross margins dropped, operating margins improved, net margins grew.

Revenue details
Northrop Grumman logged revenue of $6.51 billion. The 18 analysts polled by S&P Capital IQ looked for revenue of $6.68 billion. Sales were 24% lower than the prior-year quarter's $8.61 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $2.09. The 22 earnings estimates compiled by S&P Capital IQ forecast $1.68 per share on the same basis. GAAP EPS of $2.08 for Q4 were 64% higher than the prior-year quarter's $1.27 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was -14.0%, 3,260 basis points worse than the prior-year quarter. Operating margin was 12.3%, 310 basis points better than the prior-year quarter. Net margin was 8.4%, 400 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $6.30 billion. On the bottom line, the average EPS estimate is $1.63.

Next year's average estimate for revenue is $25.20 billion. The average EPS estimate is $6.76.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 798 members out of 859 rating the stock outperform, and 61 members rating it underperform. Among 257 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 246 give Northrop Grumman a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Northrop Grumman is hold, with an average price target of $59.88.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Northrop Grumman. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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