Northrop Grumman Corporation (NYSE:NOC) is scheduled to report Q3 earnings results before markets open for trading on October 22, 2020.
The company is expected to report earnings of $5.60/share on revenue of $8.855 billion. The consensus earnings per share (EPS) of $5.60/share is based on a poll of 18 analysts and represents a growth in eps of 2.1% over the same quarter last year, when the company reported earnings of $5.49/share.
The revenue forecast of $8.855 billion based on a poll of 15 analysts implies a year-over-year (YoY) growth in revenue of 4.5%. Last year the company reported $8.475 billion in revenue for the quarter.
|Metric||Expected||Prior Year||YoY Change|
Earnings Call Trends
Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.
What are your expectations from Northrop Grumman Corporation for earnings this quarter? Let us know in the comments!
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 3.1%.
|Report Date||Price Day Prior||Price Next Day||Change %||Result|
|July 30, 2020||$315.26||$325.01||3.1%||Increase|
|April 29, 2020||$344.53||$330.67||−4.0%||Decline|
|January 30, 2020||$382.65||$374.57||−2.1%||Decline|
|October 24, 2019||$353.20||$345||−2.3%||Decline|
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.84, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.84 implies a 0.2% chance of earnings manipulation.
Fundamentals And Technical Analysis
Northrop Grumman Corporation is currently trading at $311.33/share, down −1.6% for the day. The company is trading at approximately 80.9% of its 52-week high of $385/share. The company’s stock price is down −4.2% since the last earnings report and down −0.4% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 38.32 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 21.65 and a forward P/E multiple of 13.97.
Northrop Grumman Corporation’s current share price also implies a price-to-book (P/B) multiple of 5.34. The following table summarizes some other key fundamental ratios:
|Last Reported Fiscal Period Key||FY2020.Q2|
|Period End Date||June 30, 2020|
|Stock Price (Current)||$311.33|
|P/E Ratio (Fwd)||14.0x|
|Total Debt / Total Capital||24.7%|
|Levered Free Cash Flow||$3.678 billion|
|EV / EBITDA||15.3x|
Northrop Grumman Corporation is a large-cap stock with a market capitalization of $51.903 billion and a total enterprise value of $64.772 billion. The company operates in the Industrials sector and the Aerospace & Defense industry.
Northrop Grumman Corporation operates as a security company. It provides various systems, products, and solutions in autonomous systems, cyber, space, strike, and logistics and modernization, as well as in command, control, communications and computers, intelligence, surveillance, and reconnaissance (C4ISR) to customers in the United States and internationally. The company operates through Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems segments. It designs, develops, integrates, and produces manned aircrafts, autonomous systems, spacecraft systems, high-energy laser systems, microelectronics, and other systems and sub-systems for use in the areas of intelligence, surveillance and reconnaissance, strike operations, communications, earth observations, and space science. The company also designs, develops, integrates, and produces flights, armaments, and space systems to enable national security, civil government, and commercial customers in achieving their critical missions. Its space systems include launch vehicles and related propulsion systems; missile products and defense electronics; precision weapons, armament systems and ammunition; satellites and associated space components and services; and aerospace structures. In addition, it offers C4ISR systems; radar, electro-optical/infrared, and acoustic sensors; electronic warfare systems; cyber solutions; space and intelligence processing systems; air and missile defense integration systems; navigation systems; and shipboard missiles and encapsulated payload launch systems. Further, the company provides life-cycle solutions and services in support of networks and systems, including sustainment, modernization, training and simulation, software, engineering services, cyber, rapidly-deployable global logistics, and information technology. The company was founded in 1939 and is based in Falls Church, Virginia.