WASHINGTON Northrop Grumman Corp (NOC.N) on Wednesday reported a higher-than-expected quarterly profit despite a drop in sales, and the U.S. weapons maker raised its earnings forecast.
Northrop, which makes unmanned planes, the B-2 bomber and a host of electronic equipment, said net income rose to $579 million, or $2.63 per share, in the first quarter from $489 million, or $2.03 a share, a year earlier.
Analysts polled by Thomson Reuters I/B/E/S had expected a net profit of $2.15 per share.
Chief Executive Officer Wes Bush said the rise in earnings per share was due to the company's performance and stock repurchases. Northrop had about 9 percent fewer shares outstanding during the latest quarter.
Operating margins hit 14.4 percent, up two percentage points from the year-earlier period.
Revenue dropped about 4 percent to $5.84 billion, in line with Wall Street expectations, and reflected cuts in U.S. military spending across the industry.
Revenue fell in all four of the company's divisions - aerospace, electronic systems, information systems and technical services. Operating income rose 20 percent in the aerospace sector due to a $48 million increase in net favorable adjustments, which more than offset lower sales.
The company raised its earnings-per-share outlook for the full year to a range of $8.90 to $9.15. Its previous forecast was $8.70 to $9.00.
Northrop said it expected a full-year operating margin of about 13 percent, compared with an earlier forecast of 12 percent.
The company repurchased 4.8 million shares in the first quarter and said it was more than a third of the way to its goal of retiring 60 million shares by the end of 2015, market conditions permitting.
(Reporting by Andrea Shalal; Editing by Lisa Von Ahn)
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