Northrop Grumman Corp. (NYSE: NOC) reported fourth-quarter and full-year results before markets opened this morning. For the quarter, the defense contractor posted diluted earnings per share (EPS) of $2.14 on revenues of $6.48 billion. In the same period a year ago, the company reported EPS of $2.09 on revenues of $6.51 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.74 EPS and $6.33 billion in revenues.

For the full year, Northrop Grumman posted diluted EPS of $7.81 on revenues of $25.22 billion, compared with EPS of $7.52 on revenues of $26.41 billion in 2011. The consensus estimate called for EPS of $7.41 on revenues of $25.07 billion.

On a pension-adjusted basis, the company posted EPS of $1.85 in the fourth-quarter, still well above the consensus estimate.

The company’s CEO said:

As we look ahead, we expect challenges, but we are confident in our team’s ability to address those challenges and continue to create value for all our stakeholders.

The most important part of today’s release is the guidance the company provided. For 2013, Northrop expects revenue to total about $24 billion and EPS to come in at $6.85 to $7.15. While those numbers are close to estimates calling for EPS of $6.99 on revenues of $24.36 billion, the story is all about the federal budget:

The company’s 2013 financial guidance is based on the assumption that the current six-month Continuing Resolution (CR) will be immediately followed by appropriations, which, even if in the form of a full-year CR, will provide for program spending levels consistent with those set forth in the President’s FY 2013 Budget request (PBFY13) and that support and fund the company’s programs.

Thus, even if Congress and the president agree on a budget plan, the plan will cut U.S. defense spending and Northrop’s revenues will drop by at least $1 billion over the year. And that’s the happy face.

Northrop’s shares are up about 1.5% in premarket, trading at $67.75 in a 52-week range of $56.59 to $71.25. Thomson Reuters had a consensus analyst price target of around $66.50 before today’s report.

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