© Reuters. A Northrop Grumman building is shown in El Segundo, California, U.S., February 7, 2019. REUTERS/Mike Blake
By Mike Stone and Nathan Gomes
(Reuters) -Northrop Grumman Corp missed fourth-quarter revenue estimates on Thursday as labor shortages and supply chain snarls hampered its ability to deliver components for defense products, including Lockheed Martin (NYSE:)’s F-35 jets.
The defense contractor’s sales fell 15% in the final three months of 2021 to $8.64 billion, falling short of the average analyst estimate of $8.99 billion, according to Refinitiv data.
The drop was driven by a 25% decline in revenue from its aeronautics unit that makes the center fuselage for fighter jets and also reflected how the pandemic has hobbled manufacturers by disrupting supply chains.
Northrop (NYSE:)’s shares fell 1.7% before the bell as its 2022 forecast suggested the supply chain pressure was likely to continue. The company expects sales of between $36.2 billion and $36.6 billion this year, below estimates of $37.03 billion.
But its space systems business was a bright spot, with revenue rising 4% in the fourth quarter as countries ramped up investment in space exploration and satellite-based sensors.
Quarterly net earnings rose to $2.71 billion, or $17.14 per share, from $330 million, or $1.97 per share, a year ago, aided by a one-time gain on the sale of its IT services business.
On an adjusted basis, the company earned $6 per share, beating estimates of $5.96 per share.
Its total profit for 2021 more than doubled to $7 billion.
The results come after Lockheed Martin and Raytheon Technologies (NYSE:) Corp beat analysts’ estimates for quarterly profit, encouraged by easing restrictions around the globe.
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