Northrop Grumman Corp. (NOC - Free Report) is scheduled to release fourth quarter and 2019 results on Jan 30, before the opening bell.

Sales growth in the companys Aerospace Systems and Innovation Systems segments is likely to show on the companys fourth-quarter top line.

Northrop Grumman surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 11.48%.

Let's take a closer look at the factors influencing the companys upcoming results.

Aerospace Systems: A Key Catalyst

The companys Aerospace Systems segment has been a major revenue driver and is anticipated to retain this trend in the to-be-reported quarter. Increased production of F-35 jets is expected to have boosted this units top line. Moreover, the company is expected to have delivered 34 center fuselage units, indicating an increase of 62% from the year-ago quarters count.

The Zacks Consensus Estimate for revenues of this unit in the fourth quarter is pegged at $3,474 million, implying growth of 8.7% from the figure reported in the year-ago quarter.

Other Segments to Drive Revenues

Northrop Grummans Innovation Systems unit designs and manufactures the Advanced Anti-Radiation Guided Missile (AARGM), for which it has been witnessing higher demand globally. Notably, in the fourth quarter, the segment delivered its 1000th AGM-88E AARGM, which is likely to have boosted the companys revenues in the to-be-reported quarter. Consequently, the Zacks Consensus Estimate for revenues of this unit in the fourth quarter is pegged at $1,584 million, suggesting growth of 8.4% from the figure reported in the year- ago quarter.

Technology Service Unit to Prosper

In the third quarter, sales in the Technology Services segment rose 3%, whereas operating income rose 23% with an operating margin rate of 12.7%. Based on a strong year-to-date performance, Northrop Grumman raised its guidance for the segment's operating margin rate. The Zacks Consensus Estimate for revenues of this unit in the fourth quarter is pegged at $1,081 million, indicating a 1.5% increase from the figure reported in the year-ago quarter.

Q4 Backlog to Thrive

Northrop Grumman has an impressive history of witnessing a steady flow of orders from both Pentagon and its foreign allies, courtesy of the huge demand for its manned and unmanned aircraft and military radars. Notably, during the fourth quarter, the companys business subsidiary, Northrop Grumman Systems Corp., secured a $1-billion contract for the production of Active Electronically Scanned Array (AESA) radars. It also secured a series of other smaller contracts. This is expected to get reflected in the company's backlog count in the to-be-reported quarterly results.

Earnings & Revenue Estimates

With all segments reflecting top-line growth for the fourth quarter, we are optimistic about Northrop Grummans overall performance. Evidently, the Zacks Consensus Estimate for the companys fourth-quarter sales is pegged at $8.82 billion, indicating 8.2% growth from the year-ago quarters reported figure.

However, Northrop Grummans unallocated corporate expenses are typically on the higher side in the fourth quarter. Such expenses might have outweighed the operating margin gain due to updated cash pension estimates following the completion of its annual demographic study. In line with this, the consensus mark for the companys fourth-quarter earnings, pegged at $4.78 per share, indicates a 3% decline from the year-ago quarters reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Northrop Grumman this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But thats not the case here. You can uncover the best stocks to buy or sell before theyre reported with our Earnings ESP Filter.

Northrop Grumman has an Earnings ESP of -0.69% and a Zacks Rank #3. You can see the complete list of todays Zacks #1 Rank stocks here.

Northrop Grumman Corporation Price and EPS Surprise

Stocks to Consider

Here are some defense companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Textron (TXT - Free Report) is scheduled to report fourth-quarter 2019 results on Jan 29. The company has an Earnings ESP of +1.85% and a Zacks Rank #3.

Heico Corporation (HEI - Free Report) is expected to release fourth-quarter 2019 results soon. The company has an Earnings ESP of +8.94% and a Zacks Rank #1.

Aerojet Rocketdyne Holdings (AJRD - Free Report) is expected to release fourth-quarter 2019 results soon. The company has an Earnings ESP of +2.17% and a Zacks Rank #3.

5 Stocks Set to Double

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Will Aerospace Systems Unit Drive Northrop (NOC) Q4 Earnings? - Zacks.com