Defense contractors report second quarter earnings
- July 25, 2012
Two Northern Virginia defense contractors reported second quarter earnings Wednesday. Northrop Grumman Corp. reported an increase and said it was raising its forecast for the year, while General Dynamics posted lower earnings and lowered its full-year outlook.
Northrop Grumman said second quarter earnings from continuing operations of $480 million, or $1.88 per diluted share, compared with $520 million, or $1.81 per diluted share, for the second quarter of 2011.
On a pension-adjusted basis, earnings per diluted share from continuing operations increased 13 percent to $1.79 from $1.59. The company repurchased 4.9 million shares of its common stock for approximately $295 million and said $1.1 billion in additional share repurchases were still authorized.
Revenue fell to $6.2 billion from $6.5 billion, but the company took encouragement from an increase in new orders. “We’re especially pleased with this quarter’s robust level of new business capture, the increase in total backlog, and our strong cash generation. Based on the strength of our year-to-date results, we are again increasing our earnings guidance to a range of $7.05 to $7.25 per share,” Wes Bush, chairman, chief executive officer and president, said in a statement.
General Dynamics reported second quarter earnings from continuing operations of $634 million, or $1.77 per share on a fully diluted basis, compared with 2011 earnings of $666 million, or $1.79 per share. Revenues in the quarter were $7.9 billion. Net earnings were $634 million, compared to $653 million in the second quarter of 2011.
CEO Jay Johnson said in a statement that the company’s order backlog was down to $52.4 billion in the second quarter, compared to $57.1 billion for the same time the previous year.
Uncertainty over deep federal budget cuts expected in January is affecting defense industry forecasts. “Heading into the second half of 2012, I remain very confident in our continued ability to execute. However, given the impact of first-half award delays in IS&T’s tactical communications business, as well as the likelihood of further delays in the second half, I believe it is prudent to revise the full-year earnings guidance range downward to $7.00 to $7.10 per share, fully diluted,” Johnson said.