Earnings Preview: Northrop Grumman Corporation

Oct.21.08 | About: Northrop Grumman (NOC)

Northrop Grumman Corporation (NYSE:NOC) is expected to report Q2 earnings before market open Wednesday, October 22, with a conference call scheduled for 12:30 pm ET.


Analysts are looking for EPS of $1.43 on revenue of $8.19B. The consensus range is $1.32 to $1.50 for EPS, and $8.04B to $8.37B for revenue, according to First Call. When the company reported its Q2 results it reaffirmed its FY08 EPS and FY08 revenue guidance. Northrop Grumman expects FY08 EPS of $4.90 to $5.15 vs. consensus of $5.13. The company expects FY08 revenue of approximately $33B vs. consensus of $33.33B.

Analyst Views

Friedman Billings stated after the company reported its Q2 earnings, as management didn't increase EPS or revenue guidance for 2008 and the EPS range for the second half continues to be wide. The firm believes there may be more potential margin issues for the second half of 2008. The firm reduced its 2008 EPS estimate, due to increased margin concerns, but maintained $84 price target and Outperform rating and advises they see other large-cap defense companies with better opportunities in the N-T. On September 16, Cowen downgraded the company to Neutral from Outperform, based on FAS/CAS exposure, tanker bid deferral, and some execution risk.