By Pratyush Thakur and Mike Stone
U.S. defense company Northrop Grumman on Thursday raised its annual revenue target for the second time this year after reporting a jump in third-quarter revenue and profit helped by strong weapons demand.
The tense geopolitical landscape has created a strong global appetite for U.S. weaponry, with nations actively engaged in negotiations and striking deals to acquire arms and looking to speed up ongoing contracts. Increased defense spending by the U.S. and its allies benefited Northrop's topline.
Northrop's award volume in the reported quarter was $15 billion and the book-to-bill ratio, a comparison of orders received to units shipped and billed, was 1.53 to 1.
Sales in the company's Defense Systems segment rose 6%, helped by high demand for its ammunition and rocket motors used in guided multiple-launch rocket systems, which played a crucial role in supporting Ukraine's defense efforts against Russian forces.
Ramp up of development programs, primarily the Ground-Based Strategic Deterrent (GBSD), which aims to replace the aging ICBM system and its nuclear cruise missiles boosted sales at Northrop's Space Systems division by 11% to $3.51 billion.
The company's aeronautic systems business, which houses the high-profile B21 Raider jet program, posted a 9% rise in sales.
Northrop now expects 2023 revenue to be $39 billion, from its earlier projected range between $38.4 billion and $38.8 billion.
Overall profit in the third quarter was $937 million, or $6.18 per diluted share, compared with $915 million, or $5.89 per diluted share, a year earlier.
Quarterly sales jumped 9% to $9.78 billion.
(Reporting by Pratyush Thakur in Bengaluru and Mike Stone in Washington; Editing by Shounak Dasgupta)
