Strong First Quarter for Orbital ATK Ahead of Acquisition
Orbital ATK reported strong first quarter financial results with solid double-digit increases in the top and bottom lines in what might be the company’s last earnings release ahead of its acquisition by Northrop Grumman. Sales increased 21 percent to $1.3 billion from $1.1 billion a year ago, with all three of the company’s operating segments contributing to the result. Ramp-ups in major aircraft programs, defense electronics, armament and small caliber systems, and satellite work all factored in revenue increase.
Net income climbed 52 percent to $101 million, $1.74 Earnings Per Share (EPS), from $66.4 million ($1.15 EPS), driven by lower taxes, the higher sales, and improved program performance on some propulsion system and aerospace structures contracts. Excluding acquisition-related impacts, adjusted per share earnings of $1.76 beat consensus expectations by 21 cents EPS.
The company didn’t host an earnings call given the pending acquisition by Northrop Grumman. That deal is expected to close during the second quarter.
Orders in the quarter were robust at nearly $2 billion, and when combined with $1.1 billion in option exercises, drove total backlog to $16.6 billion, a 12 percent increase from a year ago. Free cash flow was an outflow of $308.3 million.