By Masam Abbas - April 23, 2013 | Tickers: BEAV, NOC, BA | 0 Comments

Masam is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

After Obamas signing on defense sequestration and budget cuts, many have formed a bearish point of view on the aerospace and defense stocks. Lets see if this point of view needs to be rectified to some extent.

The large-cap defense stock, Northrop Grumman (NYSE: NOC), reports on April 24. The company is expected to post EPS of $1.74 according to consensus estimates.

The following organic growth rates are expected for each of the companys segments:

(1) Information Systems down 10%,

(2) Aerospace Systems down 2%,

(3) Electronic Systems down 1%

(4) Technical Services down 9%

The company is expected to burn a free cash flow of $200 billion. This has been the norm in the first quarter of the year, given the seasonality of Northrops free cash flow generation.

Originally posted here:

Sequestration: Is it a Valid Reason to Short the Aerospace industry?