By Calvin Biesecker
Defense Daily
Northrop Grumman on Wednesday opened its fiscal 2018 with solid results, driven by improved operating performance, lower taxes, and a pension benefit, and the company upgraded its earnings outlook for the year.
Net income in the quarter was up 14 percent to $739 million, or $4.21 a share, from $650 million, or $3.69 a share, a year ago, cruising past analysts’ expectations by 57 cents a share. A pension tailwind was the biggest contributor to the increased bottom line.
Sales were up 5 percent to $6.7 billion from $6.4 billion a year ago, driven by higher sales of classified aircraft systems including the Air Force’s nuclear-capable B-21 stealth bomber.
The company raised its guidance for 2018 for sales and earnings, based on better than expected results in the first quarter and a lower tax rate for the year than it had assumed in January. Sales are forecast to be between $26.5 billion and $27 billion, up $100 million from earlier projections with IDS delivering the boost. Per share earnings are now expected to be between $9.70 and $9.90, a 15-cent increase from the prior outlook.
Last year, Northrop Grumman and Boeing won contracts to develop technology for a next-generation intercontinental ballistic missile system to replace the aging, nuclear-tipped Minuteman III. The Northrop Grumman award is worth about $330 million over three years. The Air Force plans to select a single ICBM contractor in 2020, with a solicitation for the work set to appear in 2019.
The U.S. intercontinental ballistic missile fleet is armed with W-78 and W87 warheads furnished by the Department of Energy’s National Nuclear Security Administration.
