Northrop posts quarterly profit vs year-ago loss on surge in military equipment demand

Reuters
30 Jan
Northrop posts quarterly profit vs year-ago loss on surge in military equipment demand

By Utkarsh Shetti and Mike Stone

Jan 30 (Reuters) - U.S. defense company Northrop Grumman NOC.N posted a quarterly profit on Thursday, from a year-ago loss, as headwinds from its B-21 Raider stealth bomber program eased and rising geopolitical tensions stoked demand for its military equipment.

The ongoing conflicts in the Middle East and the Russia-Ukraine war have increased demand for arms across the world and has benefited U.S. defense contractors.

However, a rise in costs owing to a slower recovery in pandemic-related supply chain snags have dented margins for companies in the sector.

Northrop expects sales in 2025 to be between $42 billion and $42.5 billion, slightly short of analysts' average estimate of $42.8 billion according to data compiled by LSEG.

It expects an adjusted per-share profit of between $27.85 and $28.25 for the year, the midpoint of which is in line with expectations.

Military equipment demand is expected to remain strong as there is likely to be increased defense spending under U.S. President Donald Trump, but investor sentiment has been clouded by potential budget cuts under the newly formed Department of Government Efficiency headed by billionaire Elon Musk.

The company, which makes the nuclear-capable B-21 Raider stealth bomber, posted fourth-quarter sales of $10.69 billion, compared with $10.64 billion a year earlier.

Northrop's adjusted per-share profit for the quarter ended Dec. 31 was $6.39. It posted a loss of $1.45 a year earlier as it booked losses related to its B21 Raider program.

(Reporting by Utkarsh Shetti in Bengaluru and Mike Stone in Washington; Editing by Krishna Chandra Eluri)

((UtkarshUmesh.Shetti@thomsonreuters.com;))

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