By Lisa Beilfuss
Northrop Grumman Corp. said profit in its first quarter fell
19%, weighed down by pension costs, but the drop was less than
analysts had expected.
The defense contractor also raised its earnings forecast for the
year. The updated guidance incorporates the impact of a $500
million discretionary pension contribution in the first quarter of
2015.
Northrop now projects $9.40 to $9.60 in per-share profit, up
from its January estimate of $9.20 to $9.50 a share. The company
continues to forecast revenue of $23.4 billion to $23.8 billion
this year.
Northrop Grumman, like its U.S. and European rivals, is seeking
sales abroad amid lackluster military spending at home. Northrop
Chief Executive Wes Bush has said its international sales--which
rose 20% last year--are set to account for 15% of revenue in 2015,
with South Korea and Japan lined up to buy its high-end military
drones. In the first quarter, Northrop's technical services segment
delivered a 10% increase in operating income, due largely to growth
in international programs.
For the quarter ended March 31, Northrop reported a profit of
$484 million, or $2.41 a share, down from $597 million, or $2.63 a
share, a year earlier. The result included a per-share tax benefit
of 23 cents and a pension adjustment of 27 cents a share.
Revenue increased 1.9% to $6 billion.
Analysts were looking for $2.27 in earnings per share and $5.7
billion in revenue, according to Thomson Reuters.
Order backlog increased to $38.4 billion at the end of March, up
from $38.2 billion at the end of December. New awards totaled $6.1
billion.
Over the quarter, Northrop repurchased 5.3 million shares. The
company has led the sector in buybacks, and is on track to complete
its plan of retiring a quarter of its shares outstanding by the end
of the year.
Shares in the company, up about 9% this year through Tuesday's
close, rose 0.9% in light premarket trading.
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