The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Northrop Grumman beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share grew slightly.
Gross margins grew, operating margins increased, net margins contracted.
Northrop Grumman notched revenue of $6.48 billion. The 15 analysts polled by S&P Capital IQ hoped for revenue of $6.33 billion on the same basis. GAAP reported sales were 0.5% lower than the prior-year quarter's $6.51 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 $2.14. The 18 earnings estimates compiled by S&P Capital IQ predicted $1.75 per share. GAAP EPS of $2.14 for Q4 were 2.9% higher than the prior-year quarter's $2.08 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 24.1%, 200 basis points better than the prior-year quarter. Operating margin was 12.7%, 40 basis points better than the prior-year quarter. Net margin was 8.2%, 20 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $6.03 billion. On the bottom line, the average EPS estimate is $1.71.
Next year's average estimate for revenue is $24.36 billion. The average EPS estimate is $6.96.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 792 members out of 855 rating the stock outperform, and 63 members rating it underperform. Among 260 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 247 give Northrop Grumman a green thumbs-up, and 13 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 $65.80.
Can your portfolio provide you with enough income to last through retirement? You'll need more than Northrop Grumman. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.
- Add Northrop Grumman to My Watchlist.
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.