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Will Soft Segmental Sales Hurt Northrop's (NOC) Q1 Earnings?
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Northrop Grumman Corporation (NOC - Free Report) is scheduled to report first-quarter 2022 results on Apr 28 before market open.
Northrop has a four-quarter earnings surprise of 11.05%, on average. The company’s top-line performance might have been dampened by an anticipated decline in the majority of its segment sales.
Aeronautic Systems – a Drag on Revenues
Lower volumes in manned aircraft and autonomous systems might have unfavorably contributed to the first-quarter revenue performance of the segment. Moreover, lower F-35 sales are likely to have negatively impacted the Aeronautic segment’s performance in the soon-to-be-reported quarter. This, in turn, might have resulted in lower revenues from the segment in the first quarter.
The Zacks Consensus Estimate for Aeronautic Systems’ revenues in the first quarter is pegged at $2,668 million, indicating a decline of 10.8% from the revenues reported in the year-ago quarter.
Defense Systems’ Performance Remains Gloomy
The closing of the contract at the U.S. Army’s Lake City ammunition plant might have negatively impacted Defense Systems’ revenues in the soon-to-be-reported quarter. However, higher volumes in medium-caliber weapon programs might have partially offset the downside effect on this segment’s performance.
The Zacks Consensus Estimate for the Defense Systems segment’s revenues in the first quarter is pegged at $1,440 million, indicating a decline of 7.8% from the revenues reported in the year-ago quarter.
Northrop’s Mission Systems segment may reflect the impact of the reduction in sales related to the IT services divestiture, which might have impacted this segment’s sales performance in the first quarter. However, higher volumes in land systems and infrared countermeasure programs are expected to have benefited this segment’s sales performance in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Mission System’s revenues in the first quarter is pegged at $2,593 million, indicating a rise of 0.2% from the revenues reported in the year-ago quarter.
Space Systems – a Key Contributor
Revenues from the Space System business unit are expected to have gained from higher sales from the Launch & Strategic Missiles and Space business areas. This, in turn, must have boosted the segment’s revenues in the soon-to-be-reported quarter. Moreover, the positive impact of the launch of Webb Space and NASA's Artemis mission is expected to have benefited the revenue performance of the segment in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Space System’s revenues in the first quarter is pegged at $2,722 million, indicating an increase of 8% from the revenues reported in the year-ago quarter.
First-Quarter Estimates
With the majority of NOC’s segments likely to report lower sales, one can remain skeptical about the company’s top line in the soon-to-be-reported quarter. The Zacks Consensus Estimate for first-quarter sales is pegged at $8.88 billion, indicating a decrease of 3.1% from the prior-year reported figure.
Northrop expects its earnings to benefit from corporate unallocated and pension adjustments, which might have added impetus to its bottom line in the soon-to-be-reported quarter. Also, the company’s disciplined approach to cost management may have benefited its bottom line in the first quarter.
However, supply-chain challenges, labor shortages and increasing inflation are some of the factors that might have adversely impacted the company’s first-quarter bottom line.
The Zacks Consensus Estimate for first-quarter earningsis pegged at $5.95 per share, indicating a decrease of 9.4% from the prior-year reported figure.
Northrop Grumman Corporation Price and EPS Surprise
Our proven model predicts an earnings beat for NOC this time. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Here are three other defense players you may want to consider as they also have the right combination of elements to post an earnings beat this season:
Spirit Aerosystems (SPR - Free Report) has an Earnings ESP of +9.34% and a Zacks Rank #3. Spirit Aerosystems has a four-quarter average negative earnings surprise of 14.56%.
The Zacks Consensus Estimate for SPR’s first-quarter earnings indicates an improvement of 50% from the prior-year reported figure.
CAE (CAE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.
The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter earnings is pegged at 18 cents per share.
Ducommun (DCO - Free Report) has an Earnings ESP of +18.10% and a Zacks Rank #3. Ducommun delivered a four-quarter average earnings surprise of 3.80%.
The Zacks Consensus Estimate for DCO’s first-quarter sales and earnings is pegged at $160.9 million and 53 cents per share, respectively.
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Will Soft Segmental Sales Hurt Northrop's (NOC) Q1 Earnings?
Northrop Grumman Corporation (NOC - Free Report) is scheduled to report first-quarter 2022 results on Apr 28 before market open.
Northrop has a four-quarter earnings surprise of 11.05%, on average. The company’s top-line performance might have been dampened by an anticipated decline in the majority of its segment sales.
Aeronautic Systems – a Drag on Revenues
Lower volumes in manned aircraft and autonomous systems might have unfavorably contributed to the first-quarter revenue performance of the segment. Moreover, lower F-35 sales are likely to have negatively impacted the Aeronautic segment’s performance in the soon-to-be-reported quarter. This, in turn, might have resulted in lower revenues from the segment in the first quarter.
The Zacks Consensus Estimate for Aeronautic Systems’ revenues in the first quarter is pegged at $2,668 million, indicating a decline of 10.8% from the revenues reported in the year-ago quarter.
Defense Systems’ Performance Remains Gloomy
The closing of the contract at the U.S. Army’s Lake City ammunition plant might have negatively impacted Defense Systems’ revenues in the soon-to-be-reported quarter. However, higher volumes in medium-caliber weapon programs might have partially offset the downside effect on this segment’s performance.
The Zacks Consensus Estimate for the Defense Systems segment’s revenues in the first quarter is pegged at $1,440 million, indicating a decline of 7.8% from the revenues reported in the year-ago quarter.
Mission Systems’ Sales Performance Appears Sluggish
Northrop’s Mission Systems segment may reflect the impact of the reduction in sales related to the IT services divestiture, which might have impacted this segment’s sales performance in the first quarter. However, higher volumes in land systems and infrared countermeasure programs are expected to have benefited this segment’s sales performance in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Mission System’s revenues in the first quarter is pegged at $2,593 million, indicating a rise of 0.2% from the revenues reported in the year-ago quarter.
Space Systems – a Key Contributor
Revenues from the Space System business unit are expected to have gained from higher sales from the Launch & Strategic Missiles and Space business areas. This, in turn, must have boosted the segment’s revenues in the soon-to-be-reported quarter. Moreover, the positive impact of the launch of Webb Space and NASA's Artemis mission is expected to have benefited the revenue performance of the segment in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Space System’s revenues in the first quarter is pegged at $2,722 million, indicating an increase of 8% from the revenues reported in the year-ago quarter.
First-Quarter Estimates
With the majority of NOC’s segments likely to report lower sales, one can remain skeptical about the company’s top line in the soon-to-be-reported quarter. The Zacks Consensus Estimate for first-quarter sales is pegged at $8.88 billion, indicating a decrease of 3.1% from the prior-year reported figure.
Northrop expects its earnings to benefit from corporate unallocated and pension adjustments, which might have added impetus to its bottom line in the soon-to-be-reported quarter. Also, the company’s disciplined approach to cost management may have benefited its bottom line in the first quarter.
However, supply-chain challenges, labor shortages and increasing inflation are some of the factors that might have adversely impacted the company’s first-quarter bottom line.
The Zacks Consensus Estimate for first-quarter earningsis pegged at $5.95 per share, indicating a decrease of 9.4% from the prior-year reported figure.
Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman Corporation price-eps-surprise | Northrop Grumman Corporation Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for NOC this time. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Northrop has an Earnings ESP of +1.32% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Here are three other defense players you may want to consider as they also have the right combination of elements to post an earnings beat this season:
Spirit Aerosystems (SPR - Free Report) has an Earnings ESP of +9.34% and a Zacks Rank #3. Spirit Aerosystems has a four-quarter average negative earnings surprise of 14.56%.
The Zacks Consensus Estimate for SPR’s first-quarter earnings indicates an improvement of 50% from the prior-year reported figure.
CAE (CAE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.
The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter earnings is pegged at 18 cents per share.
Ducommun (DCO - Free Report) has an Earnings ESP of +18.10% and a Zacks Rank #3. Ducommun delivered a four-quarter average earnings surprise of 3.80%.
The Zacks Consensus Estimate for DCO’s first-quarter sales and earnings is pegged at $160.9 million and 53 cents per share, respectively.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.