Northrop sales disappoint as supply chain snarls restrict deliveries
By Mike Stone and Nathan Gomes
(Reuters) -Northrop Grumman Corp missed fourth-quarter revenue estimates on Thursday as labor shortages and supply chain snarls hampered its ability to deliver components for defense products, including Lockheed Martin’s F-35 jets.
The defense contractor’s sales fell 15% in the final three months of 2021 to $8.64 billion, falling short of the average analyst estimate of $8.99 billion, according to Refinitiv data.
The drop was driven by a 25% decline in revenue from its aeronautics unit that makes the center fuselage for fighter jets and also reflected how the pandemic has hobbled manufacturers by disrupting supply chains.
Northrop’s shares fell 1.7% before the bell as its 2022 forecast suggested the supply chain pressure was likely to continue. The company expects sales of between $36.2 billion and $36.6 billion this year, below estimates of $37.03 billion.
But its space systems business was a bright spot, with revenue rising 4% in the fourth quarter as countries ramped up investment in space exploration and satellite-based sensors.
Quarterly net earnings rose to $2.71 billion, or $17.14 per share, from $330 million, or $1.97 per share, a year ago, aided by a one-time gain on the sale of its IT services business.
On an adjusted basis, the company earned $6 per share, beating estimates of $5.96 per share.
Its total profit for 2021 more than doubled to $7 billion.
The results come after Lockheed Martin and Raytheon Technologies Corp beat analysts’ estimates for quarterly profit, encouraged by easing restrictions around the globe.
(Reporting by Nathan Gomes in Bengaluru; Editing by Aditya Soni)