Defense contractors Northrop Grumman Corp. (NOC) and General Dynamics Corp.(GD) reported Wednesday a profit for the second quarter that topped analysts' expectations.
While Northrop raised its full-year 2012 earnings outlook, General Dynamics lowered its earnings guidance. Quarterly sales topped Street estimates at Northrop, but missed at General Dynamics.
Further, both the companies saw their results negatively impacted by primarily the performance of their respective IT solution businesses. Northrop's information systems segment revenues declined 9 percent and General Dynamics' information systems and technology segment saw revenues decline 9.9 percent.
Los Angeles, California-based Northrop, the maker of aircraft carriers and fighter jets, reported net earnings of $480 million or $1.88 per share for the second quarter, lower than $520 million or $1.81 per share in the prior-year quarter.
On a pension-adjusted basis, earnings from continuing operations grew 13 percent to $1.79 per share from $1.59 per share in the year-ago quarter.
On average, 20 analysts polled by Thomson Reuters expected earnings of $1.61 per share for the quarter. Analysts' estimates typically exclude one-time items.
However, total sales for the quarter decreased 4 percent to $6.27 billion from last year's $6.56 billion, but topped Street estimate of $6.18 billion.
"Our businesses continue to perform well, and we continue to create value through a combination of performance and effective cash deployment. We're especially pleased with this quarter's robust level of new business capture, the increase in total backlog, and our strong cash generation," Chairman, President and CEO Wes Bush noted.
Looking ahead to fiscal 2012, the company raised its guidance for earnings from continuing operations to a range of $7.05 to $7.25 per share from the earlier forecast of $6.70 to $6.95 per share. Meanwhile, the company continued to expect sales between $24.70 billion and $25.40 billion.
Street is currently looking for full-year 2012 earnings of $6.88 per share, on annual revenues of $25.06 billion.
Falls Church, Virginia-based General Dynamics reported net earnings of $634 million or $1.77 per share for the second quarter, compared to $653 million or $1.76 per share in the prior-year quarter.
On average, analysts polled by Thomson Reuters expected the company to earn $1.74 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew to $7.92 billion from $7.88 billion in the same quarter last year, but missed eighteen Wall Street analysts' consensus estimate of $7.93 billion by a whisker.
Company-wide operating margins expanded 90 basis points to 12.2 percent from last year.
"General Dynamics' operating results in the second quarter reflect our continued focus on disciplined execution and effective cash conversion across the corporation," CEO Jay Johnson noted.
Looking ahead to fiscal 2012, the company lowered its guidance for earnings to a range of $7.00 to $7.10 per share from the prior forecast of $7.10 to $7.20 per share. Street is currently looking for full-year 2012 earnings of $7.15 per share.
In Wednesday's regular trading session, NOC is currently trading at $64.11, down $0.07 or 0.11% on a volume of 0.39 million shares. In the past 52-week period, the stock has been trading in a range of $49.20 to $65.78.
GD is trading at $62.36, down $1.04 or 1.64% on a volume of 0.88 million shares. In the past 52-week period, the stock has been trading in a range of $53.95 to $74.54.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.