Northrop Grumman (NOC) reported strong revenue and earnings growth for the third quarter, which also topped the Wall Street estimates. Though the impressive results triggered a rally soon after the announcement, the stock dropped later. The company also revised up its earnings outlook for fiscal 2018.
Net earnings climbed 78% to $1.1 billion or $6.54 per share in the September quarter from $0.6 billion or $3.67 per share in the year-ago quarter and topped analysts’ estimates.
Driving the growth, net sales advanced 23% annually to $8.1 billion during the quarter when acquisition-related gains and higher sales at the Aerospace and Mission Systems were partially offset by lower sales at Technology Services.
“As we continue integrating Innovation Systems, we’re aggressively addressing the enhanced opportunity set resulting from our combination,” said Northrop COO Kathy Warden.
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Encouraged by the positive outcome, the management revised up its full-year earnings outlook to the range of $18.75 per share to $19.00 per share from the previous forecast of 16.60- 16.85 per share. The cash flow guidance was raised to the range of $2.5 billion to $2.7 Billion.
Northrop shares slipped about 3.5% since the beginning of the year, all along underperforming the S&P 500 index. The stock, which gained slightly after the earnings report Wednesday, retreated as trading progressed, losing more than 3% in the early hours.