The world’s fifth-largest defense contractor received a double-billing of good news this week via third quarter financial results that beat The Street and a landmark contract win to set its course for decades.
On Wednesday, Northrop Grumman reported third quarter earnings and sales figures that exceeded Wall Street analyst expectations and said year-over-year revenue numbers grew in three of its four business segments.
Chairman and CEO Wes Bush subsequently updated investors on the company’s plan to consolidate from four segments to three on Jan. 1 and sought to halt speculation the company could spin off or sell the future technology services sector.
“It is not… over the years, we have deemphasized commodity-based services and focused our TS sector on lifecycle support and modernization of systems and platforms as well as advanced training.”
Nearly 14 hours earlier Tuesday, Northrop scored what noted defense analyst Loren Thompson termed a “stunning upset” when the Air Force awarded the company a much-anticipated and much-coveted contract to build at least 80 Long Range Strike Bombers.
Northrop will take in up to $21.4 billion during the engineering phase and could receive up to $80 billion over decades if the Air Force purchases the maximum 100 bombers.
Bush did not have much to tell investors on the bomber’s specifics but offered this perspective on its implications for the defense industrial base in light of sector consolidation in the 1990s and again in the present time.
“I do not believe that we are in a situation that perhaps we were in in the 1990s where single program decisions can cause precipitous actions by any of the players in the industrial base. We are today in a very different configuration because of the consolidation that occurred through the 1990s and the early part of the last decade.”
Northrop’s stock has spiked 5 percent since the award and Executive Mosaic’s GovCon Index in turn hit an all-time high this week on other earnings reports that beat The Street from General Dynamics, Booz Allen Hamilton, CACI, Leidos and Orbital ATK.
Please bookmark and visit GovCon Wire for the latest financial figures from contractors, as well as the GovCon Index to follow their stock market performance.
Continue reading below for some of the other major GovCon developments from the week.
MORE TOP STORIES FROM THIS WEEK