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Northrop Grumman stock slips after profit rises above expectations but sales fall short

Shares of Northrop Grumman Corp.
NOC,
-2.12%

slipped 0.6% in premarket trading Thursday after the aerospace and defense contractor reported third-quarter profit that beat expectations but sales that fell short, as weakness in the company’s service business offset an increase in product sales. Net income rose to $1.06 billion, or $6.63 a share, from $986 million, or $5.89 a share, in the year-ago period. That beat the FactSet consensus for earnings per share of $5.99. Sales fell 4.0% to $8.72 billion, below the FactSet consensus of $8.95 billion, as product sales 2.7% to $6.85 billion while service sales fell 22.3% to $1.88 billion. “While we did see some labor related and supply chain challenges stemming from the COVID-19 pandemic on our operations, we delivered solid organic growth, outstanding segment operating margins and strong transaction-adjusted free cash flow in the quarter,” Said Chief Executive Kathy Warden. The company raised its 2021 guidance range for adjusted EPS to $25.20 to $25.60 from $24.40 to $24.80 and narrowed its sales outlook to approximately $36.0 billion from $35.8 billion to $36.2 billion. The stock has run up 27.4% year to date through Wednesday, while the S&P 500
SPX,
-0.51%

has advanced 21.2%.

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