Northrop Grumman Quarterly Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Northrop Grumman (NYSE:NOC) will unveil its latest earnings on Wednesday, October 24, 2012. Northrop Grumman offers its global customers innovative products, services, and solutions in information and services, aerospace, electronics, and shipbuilding.

Northrop Grumman Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.70 per share, a rise of 4.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from $1.67. Between one and three months ago, the average estimate moved up. It has risen from $1.69 during the last month. Analysts are projecting profit to rise by 11.6% versus last year to $7.24.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked profit of $1.79 per share versus a mean estimate of net income of $1.61 per share.

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Stock Price Performance: Between July 25, 2012 and October 18, 2012, the stock price rose $7.22 (11.3%), from $63.91 to $71.13. The stock price saw one of its best stretches over the last year between October 10, 2012 and October 18, 2012, when shares rose for seven straight days, increasing 4.3% (+$2.92) over that span. It saw one of its worst periods between January 20, 2012 and January 31, 2012 when shares fell for eight straight days, dropping 5.4% (-$3.34) over that span.

A Look Back: In the second quarter, profit fell 7.7% to $480 million ($1.88 a share) from $520 million ($1.81 a share) the year earlier, but exceeded analyst expectations. Revenue fell 4.4% to $6.27 billion from $6.56 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 4.1% in revenue from the year-earlier quarter to $6.34 billion.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 24.1% in the third quarter of the last fiscal year, 24.4% in fourth quarter of the last fiscal year and 8% in the first quarter and then fell again in the second quarter.

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 4.5% in the first quarter and then again in the second quarter.

Analyst Ratings: There are mostly holds on the stock with 11 of 16 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.37 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.32 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 4.6% to $7.7 billion while liabilities rose by 0.3% to $5.61 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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