During the quarter, adjusted net profit jumped to $851 million or $4.93 per share from $266 million or $1.52 per share in the year-ago quarter, and exceeded Wall Street estimates. Reported earnings, which includes costs related to pension and other postretirement benefits, were $2.06 per share, down 46% from $3.83 per share recorded in the fourth quarter of 2017.
Contributing to the top-line growth, sales of Aerospace Systems and Mission Systems rose 6% and 2% respectively
The earnings growth was driven by a 24% growth in sales to $8.16 billion, which also came in above the market’s expectations. Contributing to the top-line growth, sales of Aerospace Systems and Mission Systems rose 6% and 2% respectively, which was partially offset by an 8% decline in Technology Services.
The year-over-year improvement is also attributable to contributions from Orbital ATK, which was acquired by the company last year and renamed as Innovation Systems.
Looking ahead, the management expects full-year 2019 adjusted earnings in the range of $18.50 per share to $19.00 per share and free cash flow between $2.6 billion and $3.0 billion. Sales are expected to be about $34 billion. Analysts, however, look for better full-year numbers, especially in the wake of the federal government proposing a hike in defense spending.
Kathy Warden, CEO of Northrop, said, “Our fourth quarter and full year financial results, along with our 2019 outlook, demonstrate that we are on a solid growth trajectory. I’m confident we are well positioned to deliver innovative and affordable solutions, with an enhanced degree of agility to create value for our customers and shareholders.”
Rival defense contractor Lockheed Martin (LMT) recovered from a loss in the December quarter and reported earnings of $4.39 per share. Net sales rose 4.1% to $14.4 billion and surpassed estimates.
After hitting a record high nearly a year ago, Northrop shares remained in a downward spiral throughout 2018. The stock had a positive start to 2019 and recouped some of the recent losses. It traded lower during Thursday’s session.