The 10-second takeaway
For the quarter ended March 31 (Q1), Northrop Grumman met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share improved.
Margins improved across the board.
Northrop Grumman notched revenue of $6.19 billion. The 16 analysts polled by S&P Capital IQ predicted revenue of $6.25 billion on the same basis. GAAP reported sales were 8.0% lower than the prior-year quarter's $6.73 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.96. The 20 earnings estimates compiled by S&P Capital IQ forecast $1.59 per share. GAAP EPS of $1.96 for Q1 were 10% higher than the prior-year quarter's $1.78 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 21.9%, 140 basis points better than the prior-year quarter. Operating margin was 12.8%, 80 basis points better than the prior-year quarter. Net margin was 8.2%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $6.25 billion. On the bottom line, the average EPS estimate is $1.63.
Next year's average estimate for revenue is $25.08 billion. The average EPS estimate is $6.57.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 792 members out of 853 rating the stock outperform, and 61 members rating it underperform. Among 227 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 216 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 $60.59.
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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 of Motley 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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