Northrop Grumman Profit Falls 9.3%

Northrop Grumman Corp. on Wednesday posted a 9.3% dip in profit as sales decreased worse-than-expected and the company adopted a tax method change.

The company also said it expects earnings in 2016 of $9.90 to $10.20, below analyst estimates for $10.49 a share, according to Thomson Reuters. The company expects sales between $23.5 billion and $24 billion, compared with analyst estimates for $24.47 billion.

Northrop has been one of the defense industry's top performers, with share prices tripling since 2013 when it launched a buyback effort. During the quarter the company repurchased 1.6 million shares for $283 million, bringing the 2015 total to 19.3 million shares for $3.2 billion. As of Dec. 31, $4.3 billion remained on the company's share repurchase authorization.

For the December quarter the company posted a profit of $459 million down from $506 million a year earlier. Per-share earnings rose to $2.49 from $2.48. The company said its results in the 2015 quarter were padded 33 cents a share on the passage of the Protecting Americans from Tax Hikes Act. Adjusted for pension-related costs, per-share earnings fell to $2.18 from $2.26.

Revenue slipped 7% to $5.69 billion from $6.12 billion.

Analysts surveyed by Thomson Reuters forecast per-share earnings of $2.01 on revenue of $5.94 billion.

In October, the Pentagon announced a contract valued at more than $20 billion was awarded to Northrop Grumman over Boeing Co. and Lockheed Martin Corp. to build the first 21 jets to replace aging B-52 and B-1 warplanes.

On Thursday, shares of Northrop Grumman, which have fallen 17% over the past 12 months, were inactive premarket.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

January 28, 2016 07:25 ET (12:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.