No Good Deed Goes Unpunished at Northrop Grumman, as Cost Improvements Cut Profits in Half
Northrop Grumman: Great defense contractor, but it's still an expensive stock.
Northrop Grumman (NYSE: NOC) stock is in a funk. With the company reporting earnings on Tuesday, the stock promptly tanked 12.6%. Rebounding briefly on Wednesday, Northrop then proceeded to resume sliding a day later before bouncing again on Friday.
It's not hard to guess why. Year over year, Northrop Grumman suffered a significant slide in sales as two of its business segments -- its two biggest business segments, aeronautics and space -- saw sales weaken by 8% and 18%, respectively, in the first quarter. Modest gains in the company's other two, smaller businesses of defense and mission systems weren't enough to keep sales stable.
Total sales across the company fell 7%.
