By Mike Stone and Nathan Gomes
(Reuters) – U.S. defense contractor Northrop Grumman Corp on Thursday said it expected full-year sales and profit to be near the lower end of its forecast, amid lingering supply chain snags and higher costs that have weighed on earnings throughout the industry.
The company had forecast 2022 sales in the range of $36.2 billion to $36.6 billion, and a profit per share between $24.50 and $25.10.
Defense companies, still reeling from higher costs and labor shortages, continue to suffer from supply chain constraints that have impacted production at these companies and their suppliers.
Northrop, which has struggled with labor challenges caused by the Omicron variant of COVID-19 at the beginning of the year, said it now saw improving trends in labor availability.
Revenue at its Aeronautics Systems unit, which manufactures military aircrafts such as the B-21 Raider, fell about 7% to $2.54 billion in the third quarter ended Sept. 30, due to lower sales of planes and autonomous aircraft systems.
Overall revenue rose 3% in the quarter to $8.97 billion, helped by higher sales of products and services at its Space Systems division which makes satellites and missile systems.
“The Space segment will remain the biggest driver for the next couple years with GBSD, Space Development Agency wins,” Wolfe Research analyst Myles Walton wrote in a note earlier this month.
Sales at the Space Systems division, aided by higher demand for space exploration, rose about 18% to $3.16 billion, helping the Falls Church, Virginia-based company offset lower sales at the aeronautics and defense units.
Northrop reported a 14% fall in quarterly adjusted net earnings to $915 million, or $5.89 per share.
Its year-to-date book-to-bill, which is a ratio of orders received to units shipped and billed, was 1.14.
(Reporting by Nathan Gomes in Bengaluru; editing by Milla Nissi)
