RBR50 Company Northrop Grumman reported first quarter 2014 net earnings increased 18 percent to $579 million, or $2.63 per diluted share. This is compared to $489 million, or $2.03 per diluted share, in the first quarter of 2013.
Sales for Northrop’s Aerospace division, which includes unmanned systems, dropped 2.6 percent from $2,485,000 to $2,420,000, which it attributes to lower volume for space and unmanned programs. The lower unmanned sales reflect volume declines for programs including the Global Hawk and Fire Scout drones, although these are partially offset by higher volume for NATO Alliance Ground Surveillance.
Aerospace Systems first quarter 2014 operating income increased 20 percent, and operating margin rate increased 250 basis points to 13.4 percent. The company says that higher operating income and operating margin rate are primarily due to a $48 million increase in net favorable adjustments, which more than offset the impact of lower sales.
In contrast, volume for manned military aircraft programs was comparable to the prior year period.
The first quarter earnings include a $51 million, $0.23 per share, tax benefit resulting from the partial resolution of the Internal Revenue Service examination of Northrop?s 2007-2009 tax returns.
First quarter 2014 diluted earnings per share are based on 220.4 million weighted average shares outstanding compared with 241 million shares in the first quarter of 2013, a decrease of approximately 9 percent.
Northrop repurchased 4.8 million shares of its common stock for $564 million in the first quarter of 2014. As of March 31, 2014, the company had repurchased 25.6 million shares toward its previously announced goal of retiring 60 million shares of its common stock by the end of 2015, market conditions permitting.
?First-quarter results reflect another solid performance by our team and a good start to the year,? says Wes Bush, chairman, chief executive officer and president of Northrop Grumman. “Our sustained performance, coupled with share repurchases, drove higher earnings per share for the quarter. We continue to focus on performance, cash deployment and portfolio alignment as the primary value creation drivers for our shareholders, customers and employees.?