Northrop Grumman Corporation NOC is scheduled to report third-quarter 2024 results on Oct. 24, before market open.
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The company delivered a trailing four-quarter average earnings surprise of 7.68%. The strong revenue performance across each of its segments is likely to have contributed to its earnings. However, high interest expenses might have partially weighed on the bottom line.
Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman Corporation Price and EPS Surprise
Higher sales volumes from sustainment and production work for F-35 program, as well as those from the B-21 and Triton programs, are likely to have boosted the third-quarter revenue performance of the Aeronautics Systems segment.
The Zacks Consensus Estimate for the segment’s revenues is pegged at $2,900.9 million, indicating a rise of 4.9% from the year-ago quarter’s reported figure.
Defense Systems Reflects Solid Growth Potential
Higher sales volumes from multiple defense and weapons programs, particularly the Guided Multiple Launch Rocket System, the Stand-in Attack Weapon and the Integrated Battle Command System programs, are likely to have aided the Defense unit’s revenue performance in the third quarter.
The Zacks Consensus Estimate for Defense Systems’ revenues is pegged at $2,355.2 million, indicating a surge of 65.7% from the year-ago quarter’s reported number.
Mission Systems to Remain Solid
Higher sales volume from the advanced microelectronics program and the Surface Electronic Warfare Improvement Program is expected to have favorably impacted Mission Systems’ revenue performance in the to-be-reported quarter.
The Zacks Consensus Estimate for Mission System’s third-quarter revenues is pegged at $2,709.8 million, indicating growth of 3.1% from the year-ago quarter’s reported actuals.
Space Systems Might Report Poor Results
Higher volumes from programs like the Space Development Agency Tranche 2 Transport Layer and Sentinel are likely to have positively impacted the Space System segment's revenues. However, contract termination for its restricted Space business and the Next Generation Interceptor program might have adversely impacted this unit’s overall top-line performance.
The Zacks Consensus Estimate for Space Systems’ third-quarter revenues is pegged at $2,933.8 million, implying a decline of 16.3% from the year-ago quarter’s reported number.
Backlog Projections Show Strength
Our model estimates NOC’s third-quarter backlog to improve 8.6% year over year to $91.15 billion. This indicates strength in its business operations that fuels the demand for its products.
Q3 Estimates
With three out of NOC’s four segments likely to report a year-over-year improvement in sales, one can be optimistic about the company’s top-line results.
The Zacks Consensus Estimate for sales is pegged at $10.23 billion, indicating an increase of 4.7% from the prior-year reported figure.
A solid top-line improvement, along with a solid segment operating margin, backed by improving operational efficiencies, higher net pension income, lower share count and lower corporate unallocated expense, is likely to have aided Northrop's overall earnings. However, high interest expenses and lower margin performance at the Space Systems unit might have had some adverse impact on the company’s bottom-line performance.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $6.06 per share, implying a decline of 1.94% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Northrop this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Northrop has an Earnings ESP of +1.12% and a Zacks Rank #2 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Below, we have mentioned a few other promising players from the same industry that, too, have the right combination of elements to beat on earnings this reporting cycle.
L3Harris Technologies LHX is set to report third-quarter earnings on Oct. 24, after market close. It has an Earnings ESP of +1.19% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for earnings is pegged at $3.26 per share, indicating an improvement of 2.2% from the prior-year quarter’s reported actuals. The Zacks Consensus Estimate for sales is pegged at $5.30 billion, which implies a 7.9% increase from the top line reported in the prior-year quarter.
Lockheed Martin LMT is slated to report third-quarter 2024 results on Oct. 22, before market open. It has an Earnings ESP of +1.29% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for sales is pegged at $17.28 billion, which implies a 2.4% increase from the top line reported in the prior-year quarter. The stock boasts a four-quarter average earnings surprise of 7.46%.
Virgin Galactic SPCE is expected to report third-quarter 2024 results soon. It has an Earnings ESP of +12.58% and a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for earnings is pegged at a loss of $4.10 per share, which suggests an improvement from the year-ago quarter’s reported loss of $5.60. The stock boasts a four-quarter average earnings surprise of 18.28%.
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