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Defense contractor Northrop Grumman on Wednesday lifted its full-year earnings outlook and posted upbeat first quarter results, boosted by sales of aerospace systems.

The Virginia-based company lifted its full-year earnings outlook to a range of $11.80 to $12.10, from its previous estimates of $11.30 to $11.60. It continued to project sales of $25bn.

“The boost to guidance was driven by a lower tax rate and higher pension income. The outlook for revenues and segment profitability is unchanged,” Howard Rubel, analyst at Jefferies, noted.

In the first quarter, Northrop’s profits rose to $640m or $3.63 a share, compared with $556m or $3.03 a share in the year ago period. That eclipsed analyst estimates of $2.92 a share. Sales increased 5 per cent to $6.3bn above analysts estimates of $6.1bn.

Aerospace system sales rose 13 per cent year-on-year to $2.9bn driven by higher demand for manned aircraft programmes, including increased F-35 deliveries. Space sales were comparable to the prior year period. Sales in its Mission Systems unit rose 1.7 per cent to $2.74bn.

However, sales in its technology services division, the company’s smallest unit, fell 1.6 per cent to $1.2bn driven be weaker sales for system modernisation service programmes and advanced defense services programmes.

Northrop shares are up 7 per cent so far this year and were up 0.8 per cent in pre-market trading.

Copyright The Financial Times Limited 2018. All rights reserved.

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