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Can Aerospace Unit Fuel Northrop Grumman (NOC) Q1 Earnings?
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Northrop Grumman Corporation (NOC - Free Report) is scheduled to release first-quarter 2018 results on Apr 25, before the opening bell.
The Defense giant’s Aerospace Systems remains the major growth driver. The company’s first-quarter results are expected to gain from the same. Lower corporate tax also is likely to boost results.
Let’s discuss the factors influencing Northrop Grumman’s quarterly results, in brief.
Aerospace Systems — A Key Catalyst
The Aerospace Systems segment fetches almost half of Northrop Grumman’s sales and has traditionally been a primary contributor to its top-line growth. The segment’s sales are likely to benefit from increased demand as well as aircraft deliveries. Notably, in the first quarter, the company received a number of contracts for this segment.
Among them, the significant ones are the $429-million contract for developing two Extremely High Frequency Data Rate (EHF XDR) payloads and a $255-million contact for low-rate initial production (LRIP) of three MQ-4C Triton. Such contract wins are likely to boost the Aerospace Systems segment’s first-quarter revenues.
In line with this, the Zacks Consensus Estimate for the Aerospace Systems segment stands at $3,131 million, reflecting annual growth of 16.1%.
Other Factors to Consider
The company’s total sales growth has been historically benefited from higher sales at the Aerospace Systems and Mission Systems segment. We expect the upcoming quarterly result to reflect this trend as well.
Consequently, the Zacks Consensus Estimate for revenues of $2,870 million reflect an annual increase of 5%, as the company is expected to continue with its increase in production rates for Sensors and Processing programs.
Cumulatively, this is likely to boost the company’s total sales growth for the first quarter. Evidently, the Zacks Consensus Estimate for first-quarter revenues is pegged at $6,583 million, reflecting annual growth of 5.1%.
While lower corporate tax on account of the recent tax reform is likely to boost the company’s top line, Northrop Grumman is expected to incur notable expenses in regard to its Orbital ATK acquisition. These two opposite forces may neutralize each other, as a result of which our consensus estimate for the company’s first-quarter earnings of $3.63 per share remained in line with the year-ago quarter’s figure.
Further updates on the company’s Orbital ATK acquisition can be expected once it releases first-quarter results.
Northrop Grumman Corporation Price and EPS Surprise
Our proven model does not show that Northrop Grumman is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Northrop Grumman has an Earnings ESP of -0.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Northrop Grumman carries a Zacks Rank #2, which increases the probability of earnings beat. But when combined with a negative earnings ESP, the Zacks Rank #2 makes surprise prediction difficult.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies in the Aerospace-Defense space that have the right combination of elements to post an earnings beat this quarter.
Embraer-Empresa Brasileira de Aeronautica (ERJ - Free Report) has an Earnings ESP of +450.00% and a Zacks Rank #3. The company is slated to release first-quarter results on Apr 27.
Rockwell Collins is expected to report second-quarter fiscal 2018 results on Apr 27. The company has an Earnings ESP of +0.19% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can Aerospace Unit Fuel Northrop Grumman (NOC) Q1 Earnings?
Northrop Grumman Corporation (NOC - Free Report) is scheduled to release first-quarter 2018 results on Apr 25, before the opening bell.
The Defense giant’s Aerospace Systems remains the major growth driver. The company’s first-quarter results are expected to gain from the same. Lower corporate tax also is likely to boost results.
Let’s discuss the factors influencing Northrop Grumman’s quarterly results, in brief.
Aerospace Systems — A Key Catalyst
The Aerospace Systems segment fetches almost half of Northrop Grumman’s sales and has traditionally been a primary contributor to its top-line growth. The segment’s sales are likely to benefit from increased demand as well as aircraft deliveries. Notably, in the first quarter, the company received a number of contracts for this segment.
Among them, the significant ones are the $429-million contract for developing two Extremely High Frequency Data Rate (EHF XDR) payloads and a $255-million contact for low-rate initial production (LRIP) of three MQ-4C Triton. Such contract wins are likely to boost the Aerospace Systems segment’s first-quarter revenues.
In line with this, the Zacks Consensus Estimate for the Aerospace Systems segment stands at $3,131 million, reflecting annual growth of 16.1%.
Other Factors to Consider
The company’s total sales growth has been historically benefited from higher sales at the Aerospace Systems and Mission Systems segment. We expect the upcoming quarterly result to reflect this trend as well.
Consequently, the Zacks Consensus Estimate for revenues of $2,870 million reflect an annual increase of 5%, as the company is expected to continue with its increase in production rates for Sensors and Processing programs.
Cumulatively, this is likely to boost the company’s total sales growth for the first quarter. Evidently, the Zacks Consensus Estimate for first-quarter revenues is pegged at $6,583 million, reflecting annual growth of 5.1%.
While lower corporate tax on account of the recent tax reform is likely to boost the company’s top line, Northrop Grumman is expected to incur notable expenses in regard to its Orbital ATK acquisition. These two opposite forces may neutralize each other, as a result of which our consensus estimate for the company’s first-quarter earnings of $3.63 per share remained in line with the year-ago quarter’s figure.
Further updates on the company’s Orbital ATK acquisition can be expected once it releases first-quarter results.
Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman Corporation Price and EPS Surprise | Northrop Grumman Corporation Quote
Earnings Whispers
Our proven model does not show that Northrop Grumman is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Northrop Grumman has an Earnings ESP of -0.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Northrop Grumman carries a Zacks Rank #2, which increases the probability of earnings beat. But when combined with a negative earnings ESP, the Zacks Rank #2 makes surprise prediction difficult.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies in the Aerospace-Defense space that have the right combination of elements to post an earnings beat this quarter.
Boeing (BA - Free Report) is expected to report first-quarter results on Apr 25. The company has an Earnings ESP of +1.70% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Embraer-Empresa Brasileira de Aeronautica (ERJ - Free Report) has an Earnings ESP of +450.00% and a Zacks Rank #3. The company is slated to release first-quarter results on Apr 27.
Rockwell Collins is expected to report second-quarter fiscal 2018 results on Apr 27. The company has an Earnings ESP of +0.19% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>