Northrop, Raytheon lower after cutting 2017 expectations

• Northrop Grumman (NOC -2.4%) and Raytheon (RTN -3.3%) are sharply lower after delivering 2017 earnings forecasts below Wall Street consensus.
• NOC says it expects EPS of $11.30-$11.60 for the year, compared to the $12.25 analyst consensus, and RTN sees full-year EPS of $7.20-$7.35, vs. $7.48 consensus.
• Jefferies analyst Howard Rubel attributes NOC's disappointing guidance to expected margins that likely are the result of product mix and the company's effort to win additional work; 2017 capex is expected to total $900M, well above what some analysts had expected.
• RTN's Q4 earnings fell short of expectations on weaker than expected sales, as the quarter included four fewer work days than the previous year, reducing sales by ~$100M/day.
• Meanwhile, L-3 Communications (LLL +3.6%) is higher after posting a solid Q4 beat and saying it expects FY 2017 EPS of $8.40-$8.60, vs. the $8.43 consensus estimate.