FALLS CHURCH, Va., Jan. 29, 2024 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE:NOC) today announced that it has entered into an accelerated share repurchase (ASR) agreement with Morgan Stanley & Co. LLC to repurchase $1 billion of Northrop Grumman's common stock. The company continues to target returning well over 100% of its free cash flow to shareholders through dividends and share repurchases in 2024. Under the ASR agreement, Northrop Grumman expects to receive an initial delivery of approximate ...

Northrop Grumman Corp.’s stock fell by 6% Thursday after the defense contractor posted a fourth-quarter loss on costs associated with the production launch of its B-21 stealth bomber. The company also signaled that it could face cost overruns on the bomber, which is able to fly without human pilots onboard. Northrop NOC, -5.91% and other defense contractors are facing higher costs and a reduced chance of receiving inflation payments from the U.S. government. Northrop said it lost $535 million, or $3.54 a ...

Northrop Grumman Corporation. (NYSE:NOC) Q4 2023 Earnings Conference Call January 25, 2024 ET Company Participants Todd Ernst - Vice President, Investor Relations Kathy Warden - Chair, CEO and President Dave Keffer - CFO Conference Call Participants Kristine Liwag - Morgan Stanley Richard Safran - Seaport Global Ronald Epstein - Bank of America Douglas Harned - Bernstein Sheila Kahyaoglu - Jefferies Seth Seifman - JPMorgan Cai von Rumohr - TD Cowen Gavin Parsons - UBS Scott Deuschle - Deutsche Bank Kenneth ...

2022 2023 Legal and Regulatory Risks • unanticipated changes in our tax provisions or exposure to additional tax liabilities NORTHROP GRUMMAN • cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners, and changes in related regulations • our ability to attract and retain a qualified, talented and diverse workforce with the necessary security clearances to meet our performance obligations • the performance and viability of our subcontractors and supplier ...

Northrop Grumman Corporation (NOC) reported fourth-quarter 2023 adjusted earnings of $6.27 per share, which beat the Zacks Consensus Estimate of $5.75 by 9%. However, the bottom line decreased from $7.50 per share recorded in the year-ago quarter.The company incurred a GAAP loss of $3.54 per share, which deteriorated from earnings of $13.46 generated in the fourth quarter of 2022.Northrop Grumman reported 2023 adjusted earnings of $23.29 per share, which surpassed the Zacks Consensus Estimate of $22.76 by 2 ...

Northrop Grumman (NOC) reported $10.64 billion in revenue for the quarter ended December 2023, representing a year-over-year increase of 6%. EPS of $6.27 for the same period compares to $7.50 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $10.44 billion, representing a surprise of +1.93%. The company delivered an EPS surprise of +9.04%, with the consensus EPS estimate being $5.75.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- ...

Northrop Grumman (NOC) came out with quarterly earnings of $6.27 per share, beating the Zacks Consensus Estimate of $5.75 per share. This compares to earnings of $7.50 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 9.04%. A quarter ago, it was expected that this defense contractor would post earnings of $5.81 per share when it actually produced earnings of $6.18, delivering a surprise of 6.37%.Over the last four quarters, the ...

Investors are always looking for stocks that are poised to beat at earnings season and Northrop Grumman Corporation (NOC) , may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because Northrop Grumman is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — ...

Cash and Liquidity - Cash and cash equivalents as of December 31, 2023, totaled $3.1 billion, with $277 million held outside the U.S. by foreign subsidiaries[248] - The company has $20.7 billion in purchase obligations, approximately half of which is short-term, primarily related to U.S. government contracts[249] - Capital expenditure commitments as of December 31, 2023, amounted to $1.4 billion, expected to be satisfied with cash on hand[249] - Net cash provided by operating activities in 2023 increased by 34% to $3.875 billion, driven by improved trade working capital[254] - Adjusted free cash flow in 2023 increased by 30% to $2.1 billion, primarily due to higher operating cash flow[256] - The company issued $2.0 billion in unsecured senior notes in February 2023 for general corporate purposes, including debt repayment and share repurchases[248] - Cash returned to shareholders through share repurchases and dividends totaled $2.6 billion in 2023[258] - The impact of IRC Section 174 on cash from operations was estimated at $700 million for 2022 and $500 million for 2023[252] - The company's liquidity is supported by a $2.5 billion senior unsecured credit facility and a $500 million uncommitted credit facility[248] Pension and Benefits - The weighted-average composite pension discount rate was 5.15% at December 31, 2023, compared to 5.54% at December 31, 2022[268] - A 25 basis point decrease in the discount rate would increase the 2023 pension and OPB obligation by $866 million, while a 25 basis point increase would decrease it by $827 million[269] - The cash balance crediting rate assumption has been set to 4.02% for all years, with a minimum rate of 2.25% allowed under the plan[271] - The company's average annual rate of return from 1976 to 2023 was approximately 10.7%, with a 2023 return on plan assets of 11.1%[273] - A 100 basis point decrease in actual versus expected return on plan assets would increase the 2024 MTM expense by $305 million, while a 100 basis point increase would decrease it by $305 million[276] - Net periodic benefit cost for pension benefits was $148 million in 2023, compared to a benefit of $2.4 billion in 2022[448] - The fair value of pension plan assets increased to $30.251 billion in 2023 from $28.92 billion in 2022, driven by an 11.1% net plan asset return[450] - The projected benefit obligation for pension plans increased to $30.443 billion in 2023 from $29.067 billion in 2022, primarily due to a $1.6 billion interest cost[450] - The accumulated benefit obligation for all defined benefit pension plans was $30.1 billion in 2023, up from $28.8 billion in 2022[451] - Discount rate for pension benefits in 2023 is 5.15%, down from 5.54% in 2022[453] - Expected long-term return on plan assets for pension benefits remains at 7.50% for 2023[453] - Initial health care cost trend rate for 2023 is 6.20%, down from 6.50% in 2022[453] - Fair value of plan assets at the end of 2023 is $31.525 billion, up from $30.146 billion in 2022[457] - Estimated future benefit payments for 2024 total $2.146 billion, with $2.012 billion for pension plans and $134 million for medical and life plans[466] - Company expects to contribute $99 million to pension plans and $35 million to medical and life benefit plans in 2024[466] Contracts and Revenue - Net contract assets decreased by 37% to $1.5 billion at December 31, 2023, primarily due to decreases in net contract assets at Space Systems, Missions Systems, and Aeronautics Systems[342] - Revenue recognized from contract liabilities at the beginning of 2023 was $3.1 billion, compared to $2.4 billion in 2022 and $2.0 billion in 2021[343] - Approximately half of the company's sales in 2023 were derived from fixed-price contracts, which carry higher financial risk due to inflationary pressures and labor challenges[74] - Fixed-price development contracts are inherently more uncertain, with significant variability in cost estimates, while production contracts typically have reduced risks[75] - Cost-type contracts, often used for development programs, carry financial risks related to profit recognition and potential program cancellation due to cost, schedule, or technical performance issues[76] - The company manages performance based on contract and program execution, with sales recognized as control is transferred to customers[200] - 2023 sales increased by $2.7 billion, or 7%, reaching $39.29 billion, driven by higher sales across all four sectors[205][206] Operating Performance - 2023 operating income decreased by $1.1 billion, or 30%, primarily due to a $1.56 billion charge on the B-21 program at Aeronautics Systems[207] - 2023 operating margin rate declined to 6.5% from 9.8% in 2022, reflecting the impact of the B-21 program charge and other factors[207] - 2023 MTM (mark-to-market) pension and OPB expense was $422 million, driven by a 39 basis point decrease in the discount rate and actual net plan asset returns of 11.1%[209][210] - 2023 effective tax rate decreased to 12.4% from 16.1% in 2022, primarily due to lower earnings before income taxes resulting from the B-21 charge and MTM expense[211] - 2023 net earnings decreased by $2.8 billion, or 58%, to $2.056 billion, primarily due to a $1.7 billion decrease in MTM (expense) benefit and a $1.1 billion decrease in operating income[212] - 2023 MTM-adjusted net earnings were $2.372 billion, a 40% decrease from 2022, reflecting adjustments for MTM pension and OPB impacts[212] - 2023 G&A costs as a percentage of sales decreased to 10.2% from 10.6%, primarily due to higher sales[208] Investments and Assets - The company sold its minority investment in an Australian business for AUD $235 million ($157 million), resulting in a pre-tax gain of $97 million[364][365] - The company acquired $46 million of internal use software through long-term financing in 2022, recorded as a non-cash investing activity[361] - Lease incentives for landlord-funded leasehold improvements were $55 million in 2023 and $96 million in 2022, recorded in PP&E[361] - The company exchanged company-owned land for leased land valued at $155 million, resulting in a $96 million gain[362] - Capital expenditures incurred but not yet paid were $75 million in 2023, $113 million in 2022, and $91 million in 2021[363] - Property, plant and equipment (PP&E) increased to $17.617 billion in 2023 from $16.058 billion in 2022, with net PP&E at $9.653 billion in 2023 compared to $8.8 billion in 2022[360] - The carrying value of life insurance policies was $399 million at December 31, 2023, compared to $367 million at December 31, 2022[359] - The company's portfolio of marketable securities had a fair value of $339 million at December 31, 2023, exposed to market volatilities, price changes, and interest rates[294] Debt and Financing - The company issued $2.0 billion of unsecured senior notes in February 2023, including $1.0 billion of 4.70% senior notes due 2033 and $1.0 billion of 4.95% senior notes due 2053[425] - Total long-term debt increased from $12,877 million in 2022 to $13,856 million in 2023, with the estimated fair value of long-term debt at $13.4 billion in 2023[430] - Maturities of long-term debt as of December 31, 2023, include $70 million due in 2024, $1,582 million due in 2025, and $8,963 million due thereafter[433] - The company has $13.9 billion of long-term debt, primarily fixed-rate, with a fair value of approximately $13.4 billion at December 31, 2023[295] Taxes - Total federal and foreign income tax expense for 2023 was $290 million, a significant decrease from $940 million in 2022 and $1.933 billion in 2021[476] - The 2023 effective tax rate (ETR) decreased to 12.4% from 16.1% in 2022, primarily due to lower earnings before income taxes[402] - Income tax payments, net of refunds, were $1.2 billion in 2023, compared to $1.5 billion in 2022 and $1.3 billion in 2021[404] - Unrecognized tax benefits increased to $1.994 billion at the end of 2023, up from $1.663 billion in 2022, primarily due to accounting methods and the 2017 Tax Cuts and Jobs Act[408] - The company has $615 million in available tax credits and $358 million in unused net operating losses that may be applied against future taxable income[414] - Deferred tax assets increased to $5.548 billion in 2023 from $3.488 billion in 2022, primarily due to capitalized research and experimental expenditures[413] - The company has accumulated undistributed earnings from foreign subsidiaries, which are intended to be indefinitely reinvested to fund international operations[415] - The company has approximately $2.0 billion in unrecognized tax benefits as of December 31, 2023[283] Goodwill and Intangible Assets - Goodwill balance as of December 31, 2023, totaled $17,517 million, with Aeronautics Systems and Space Systems having accumulated goodwill impairment losses of $417 million and $153 million, respectively[416] - Net customer-related and other intangible assets decreased from $384 million in 2022 to $305 million in 2023, with amortization expense for 2023 at $80 million[417] - No impairment charges were recorded for the years ended December 31, 2023, 2022, and 2021[291] Derivatives and Commitments - Derivative assets fair value is $172 million in 2023, up from $71 million in 2022[460] - Unfunded commitments for opportunistic investments are $1.6 billion in 2023, up from $1.5 billion in 2022[463] - Unfunded commitments for private equity funds are $1.9 billion in 2023, down from $2.0 billion in 2022[464] - The company's foreign currency forward contracts had a notional value of $286 million in 2023, with $162 million designated as a cash flow hedge[420] Environmental and Legal - The company expects approximately 90% of its environmental remediation costs to be recoverable as of December 31, 2023[281] Stock-Based Compensation - 4.4 million shares remain available for issuance under the 2011 Plan as of December 31, 2023[468] - Stock-based compensation expense for 2023 was $87 million, a decrease from $99 million in 2022 and $94 million in 2021[472] - Unrecognized compensation expense related to unvested stock awards at December 31, 2023 was $96 million, expected to be charged over 1.3 years[473] - The grant date fair value of shares issued in settlement of fully vested stock awards was $99 million in 2023, compared to $93 million in 2022 and $103 million in 2021[476] Market and Competitive Risks - The global security environment, including conflicts in Ukraine and Israel, may increase demand for the company's defense products and services[184][185][186] - The company faces increased competition for talent globally, with rising wage rates and challenges in attracting and retaining qualified personnel, particularly in science, technology, engineering, and math fields[111] - The company relies heavily on subcontractors and suppliers for raw materials, components, and services, with supply chain disruptions potentially impacting financial performance[114] - The company's ability to meet obligations is at risk if suppliers fail to deliver products or services on time, comply with regulations, or maintain financial viability[115] - The company requires assured access to microelectronics, with potential significant impacts on production and delivery if the supply chain is disrupted[116] - The company's international business is exposed to geopolitical, economic, and regulatory risks, which could affect profitability and operations[119] - The company's international contracts may include local content requirements, offset obligations, and financial penalties, increasing operational risks[123] - The company's Sentinel program is under a Nunn-McCurdy breach review due to increased cost projections, primarily in construction and procurement[197] - The company faces inflation risks, particularly impacting fixed-price contracts, such as the LRIP phase of the B-21 program at Aeronautics Systems[297] Divestitures and Acquisitions - The company completed the divestiture of its IT and mission support services business for $3.4 billion, recording a pre-tax gain of $2.0 billion[198] - The company recorded $162 million in sales and $20 million in pre-tax profit for the IT and mission support services business in 2021[199] Valuation and Fair Value - The company uses the income approach to determine the fair value of reporting units, projecting sales, operating expenses, working capital, capital spending, and cash flows over a multi-year period, with a weighted-average cost of capital (WACC) as the discount rate[289]

Northrop Grumman Corporation (NOC) is scheduled to report fourth-quarter and full-year 2023 results on Jan 25 before market open.Northrop delivered a four-quarter earnings surprise of 6.79%, on average. The strong revenue performance across its segments is likely to have contributed to the company’s earnings in the to-be-reported quarter. However, interest expenses might have weighed on the bottom line.Aeronautics Systems to Boost the Top LineHigher sales volumes of manned aircraft, along with stable contri ...