Aerospace and defense company Northrop Grumman Corp. (NOC: Quote) on Wednesday reported a 46 percent increase in profit for the fourth quarter, as higher segment income, improvement in net pension adjustment and lower unallocated corporate expenses offset a decline in revenues that reflected the impact of U.S. Government spending constraints.
Looking ahead to fiscal year 2012, the company forecasts earnings and revenue below analysts' expectations.
The company's net earnings for the fourth quarter rose to $548 million or $2.09 per share from $376 million or $1.27 per share in the year-ago period.
Earnings from continuing operations for the quarter were $550 million or $2.09 per share, up from $306 million or $1.03 per share in the same period last year.
The prior-year period results included a pre-tax charge of $229 million or $0.50 per share, principally related to premiums paid to redeem $682 million in debt in 2010.
Adjusted earnings per share from continuing operations rose to $1.85 from $1.51 in the prior-year period. On average, 21 analysts polled by Thomson Reuters expected the company to earn $1.67 per share. Analysts' estimates typically exclude special items.
However, total sales for the quarter declined 6 percent to $6.51 billion from $6.90 billion in the previous-year quarter. Analysts had a consensus estimate of $6.67 billion.
The decline in sales reflects the impact of U.S. Government spending constraints and the company's actions to reduce volume in non-core and underperforming businesses.
Sales declined at all four of the company's segments, while operating income increased at three segments.
The company's operating income rose 18 percent to $799 million, and as a percent of sales increased 250 basis points to 12.3 percent. Segment operating income rose 3 percent to $773 million, and as a percent of sales improved 100 basis points to 11.9 percent.
The company's total backlog as at December 31, 2011 declined to $39.52 billion from $46.84 billion a year ago. The change in backlog reflects new business awards totaling $25.3 billion in 2011.
For fiscal year 2011, Northrop Grumman's net earnings increased to $2.12 billion or $7.52 per share from $2.05 billion or $6.82 per share last year.
Excluding the impact of special items, earnings per share from continuing operations rose to $6.49 from $5.80 last year. Analysts expected earnings of $7.00 per share.
Sales for the year declined 6 percent to $26.41 billion from $28.14 billion in the prior year. Analysts had a consensus estimate of $26.60 billion.
Looking ahead to fiscal year 2012, Northrop Grumman forecasts earnings from continuing operations in a range of $6.40 to $6.70 per share, and sales of $24.70 billion to $25.40 billion. Analysts expect the company to earn $6.80 per share for the year on revenues of $26.17 billion.
NOC closed Tuesday's trading at $58.05, down $0.15 on a volume of 2.50 million shares. The stock has been trading in a range of $49.20 to $72.50 in the past 52 weeks.
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by RTT Staff Writer
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