My name is Jake Blumenthal, I serve as a Wealth Management Advisor & Portfolio Analyst at Meridian Wealth Management, a registered investment advisory. I use a combination of financial, technical, and macroeconomic analysis to best support my clients, form my opinions, and develop investment theses. My research and data analysis shared allow me to clearly review the growth and value of companies along with a vast selection of funds and themes. It also enables me to identify both short-term trends and long-t ...

Financial Performance - Total sales for the year ended December 31, 2024, were $41.033 billion, with 51% from cost-type contracts and 49% from fixed-price contracts[50]. - Total backlog as of December 31, 2024, was $91.5 billion, up from $84.2 billion at the end of 2023, representing an increase of approximately 15.5%[31]. - The company has $16.3 billion in long-term debt, primarily consisting of fixed-rate debt, with a fair value of approximately $15.3 billion[284]. Employee Metrics - The company hired approximately 7,400 new employees in 2024, bringing the total employee count to approximately 97,000 as of December 31, 2024[34]. - Approximately 4,100 employees are covered by 15 collective agreements, with five renewals negotiated in 2024 and seven expected in 2025[43]. - In 2024, 80% of employees participated in the annual Employee Experience Survey, indicating strong engagement and feedback mechanisms[35]. Risk Management - Foreign currency forward contracts with a notional amount of $399 million were outstanding as of December 31, 2024, to manage exchange rate risks[285]. - The company faced challenges with access to certain raw materials due to macroeconomic factors, but these have not materially impacted contract performance[33]. - The company’s fixed-price contracts may carry higher profit margins but also involve more financial risk associated with unanticipated cost growth[48]. Investment and Market Exposure - At December 31, 2024, the company had a portfolio of marketable securities valued at $347 million, exposing it to market volatilities[283].

Core Insights - Northrop Grumman Corporation (NOC) reported strong fourth-quarter 2024 adjusted earnings of $6.39 per share, exceeding the Zacks Consensus Estimate of $6.27 by 1.9% and significantly improving from a loss of $1.45 per share in the same quarter last year [1][2] - The company achieved total sales of $10.69 billion in the fourth quarter, which was below the Zacks Consensus Estimate of $11.03 billion by 3.1%, but showed a slight year-over-year increase of 0.5% from $10.64 billion [3] - For the full year 2024, NOC reported adjusted earnings of $26.08 per share, surpassing the Zacks Consensus Estimate of $25.96 by 0.5% and improving from $15.61 in 2023 [2] Financial Performance - NOC's GAAP earnings for the fourth quarter were $8.66 per share, a significant recovery from a GAAP loss of $3.54 in the fourth quarter of 2023 [2] - The company's total sales for 2024 reached $41.03 billion, missing the Zacks Consensus Estimate of $41.37 billion, but representing a 4% increase from $39.29 billion in 2023 [4] - Operating income for the fourth quarter totaled $1.19 billion, a notable improvement from $0.38 million in the prior-year quarter, driven by higher income in Aeronautics Systems and Defense Systems [10] Segment Performance - Aeronautics Systems segment sales increased by 11% year-over-year to $3.22 billion, with operating income rising to $292 million from a loss of $1,271 million in the fourth quarter of 2023 [6] - Mission Systems segment sales grew by 3% to $3.14 billion, with operating income increasing by 2% to $469 million, although the operating margin contracted by 20 basis points to 14.9% [7] - Defense Systems segment sales rose by 5% to $2.33 billion, with operating income improving by 13% to $252 million, despite a deterioration in operating margin by 80 basis points to 10.8% [8] - Space Systems segment sales declined by 13% to $2.71 billion, with operating income decreasing by 5% to $275 million, although the operating margin expanded by 70 basis points to 10.1% [9] Backlog and Financial Condition - The total backlog for NOC at the end of the fourth quarter was $91.47 billion, an increase from $84.80 billion at the end of the third quarter [5] - As of December 31, 2024, the company's cash and cash equivalents totaled $4.35 billion, up from $3.11 billion a year earlier, while long-term debt increased to $14.69 billion from $13.79 billion [11] 2025 Guidance - NOC provided guidance for 2025, expecting revenues in the range of $42.00-$42.50 billion, with the consensus estimate at $42.86 billion [12] - The company anticipates adjusted earnings between $27.85-$28.25 per share, aligning with the lower end of the consensus estimate of $27.85 per share [12] - NOC projects adjusted free cash flow to be in the range of $2.85-$3.25 billion for 2025 [12]

Core Insights - Northrop Grumman reported $10.69 billion in revenue for Q4 2024, a year-over-year increase of 0.5%, with an EPS of $6.39 compared to $6.27 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $11.03 billion by -3.09%, while the EPS exceeded the consensus estimate of $6.27 by +1.91% [1] Financial Performance Metrics - Mission Systems sales were $3.14 billion, below the average estimate of $3.24 billion, reflecting a year-over-year increase of +2.6% [4] - Aeronautics Systems sales reached $3.22 billion, slightly above the average estimate of $3.20 billion, with a year-over-year increase of +10.7% [4] - Space Systems sales were $2.71 billion, below the average estimate of $2.74 billion, showing a significant year-over-year decline of -24.8% [4] - Defense Systems sales totaled $2.33 billion, below the average estimate of $2.58 billion, but represented a year-over-year increase of +41.8% [4] - Intersegment eliminations reported a revenue of -$721 million, slightly better than the average estimate of -$728.36 million, with a year-over-year change of +23.9% [4] Operating Income Analysis - Operating income for Defense Systems was $252 million, below the average estimate of $264.46 million [4] - Mission Systems operating income was $469 million, exceeding the average estimate of $457.72 million [4] - Space Systems operating income was $275 million, slightly below the average estimate of $281.02 million [4] - Aeronautics Systems operating income was $292 million, below the average estimate of $312.28 million [4] - Unallocated corporate expenses were reported at -$112 million, worse than the average estimate of -$93.95 million [4] - FAS/CAS operating adjustment showed a positive $8 million, compared to the average estimate of -$5.89 million [4] Stock Performance - Northrop Grumman shares returned +2.6% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Group 1: Earnings Performance - Northrop Grumman reported quarterly earnings of $6.39 per share, exceeding the Zacks Consensus Estimate of $6.27 per share, and showing an increase from $6.27 per share a year ago, representing an earnings surprise of 1.91% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - The revenue for the quarter ended December 2024 was $10.69 billion, which missed the Zacks Consensus Estimate by 3.09%, but showed a slight increase from $10.64 billion year-over-year [2] Group 2: Stock Performance and Outlook - Northrop Grumman shares have increased by approximately 2.6% since the beginning of the year, compared to the S&P 500's gain of 2.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $6.50 on revenues of $10.28 billion, and for the current fiscal year, it is $27.85 on revenues of $42.86 billion [7] Group 3: Industry Context - The Aerospace - Defense industry, to which Northrop Grumman belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The current estimate revisions trend for Northrop Grumman is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Fourth Quarter 2024 Conference Call Kathy Warden Chair, Chief Executive Officer and President Ken Crews Corporate Vice President and Chief Financial Officer January 30, 2025 Forward-Looking Statements This presentation and the information we are incorporating by reference, and statements to be made on the earnings conference call, contain or may contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "will," "e ...

Financial Results - Northrop Grumman Corporation has released its fourth quarter and full-year 2024 financial results [1] - The earnings release is available in the company's Form 8-K filing and on the investor relations website [1] Earnings Conference Call - Northrop Grumman will webcast its earnings conference call at 9 a.m. Eastern time [2] - A live audio broadcast of the conference call can be accessed on the investor relations website [2] Company Overview - Northrop Grumman is a leading global aerospace and defense technology company [3] - The company provides pioneering solutions that equip customers with necessary capabilities for global connectivity and protection [3] - Northrop Grumman is committed to solving customers' toughest problems and pushing the boundaries of human exploration [3]

Financial Performance - Fourth quarter 2024 sales were $10.7 billion, comparable to Q4 2023, with full-year sales increasing 4% to $41.0 billion from $39.3 billion in 2023[2]. - Fourth quarter 2024 net earnings were $1.3 billion, or $8.66 per diluted share, while full-year net earnings reached $4.2 billion, or $28.34 per diluted share[3]. - Total sales for 2024 reached $41,033 million, an increase from $39,290 million in 2023, representing a growth of approximately 4.4%[64]. - Operating income for 2024 was $4,370 million, significantly higher than $2,537 million in 2023, marking an increase of 72.5%[64]. - Net earnings for 2024 were $4,174 million, compared to $2,056 million in 2023, reflecting a growth of 102%[64]. - Basic earnings per share for 2024 were $28.39, up from $13.57 in 2023, indicating a year-over-year increase of 109%[64]. Cash Flow and Shareholder Returns - Operating cash flow for 2024 was $4.4 billion, with free cash flow of $2.6 billion, representing a 25% increase from the previous year[4]. - The company returned $3.7 billion to shareholders through share repurchases and dividends in 2024[4]. - Cash provided by operating activities increased by $148 million, or 6 percent, in the fourth quarter 2024[20]. - The company reported a net cash provided by operating activities of $4,388 million in 2024, compared to $3,875 million in 2023, an increase of 13.2%[71]. - The company repurchased common stock worth $2,514 million in 2024, compared to $1,500 million in 2023, indicating a 67.6% increase[71]. Sales Growth and Segment Performance - 2024 sales growth was driven by a 12% increase in Aeronautics Systems, with total sales growth of $1.7 billion attributed to higher sales in Mission and Defense Systems[11]. - Fourth quarter 2024 sales for Aeronautics Systems increased by $310 million, or 11 percent, driven by B-21 production[28]. - Fourth quarter 2024 sales for Defense Systems increased by $102 million, or 5 percent, primarily due to the ramp-up on Sentinel[33]. - Fourth quarter 2024 sales for Mission Systems increased by $81 million, or 3 percent, due to higher volume on advanced microelectronics programs[38]. - Fourth quarter 2024 sales for Space Systems decreased by $388 million, or 13 percent, primarily due to the wind-down of restricted space programs[44]. Backlog and Future Guidance - The company reported a book-to-bill ratio of 1.23 and a record backlog of $91.5 billion[4]. - Fourth quarter 2024 net awards totaled $17.3 billion, with a backlog of $91.5 billion[21]. - The company projects 2025 sales guidance between $42,000 million and $42,500 million, with segment operating income expected between $4,650 million and $4,800 million[51]. - Free cash flow guidance for 2025 is estimated to be between $2,850 million and $3,250 million[51]. - Aeronautics Systems segment sales are projected to be in the low $13 billion range, with an operating margin rate of approximately 9%[51]. - Defense Systems segment sales are expected to be in the low $8 billion range, also with an operating margin rate of around 9%[51]. - Mission Systems segment sales are anticipated to be around $12 billion, with a higher operating margin rate of 14%[51]. Operational Efficiency - The operating margin rate improved to 10.6% in 2024, up from 6.5% in 2023, reflecting a significant increase in operating income[13]. - Fourth quarter 2024 segment operating income increased by $1.6 billion, with a segment operating margin rate of 11.2 percent[1]. - The fourth quarter 2024 operating income increased by $1.5 billion, primarily due to higher income at Aeronautics Systems[12]. Tax and Financial Position - The effective tax rate (ETR) for the fourth quarter 2024 decreased to 18.5 percent from 29.3 percent in the fourth quarter of 2023[15]. - Total assets increased to $49,359 million in 2024 from $46,544 million in 2023, representing a growth of 6.1%[68]. - Long-term debt increased to $14,692 million in 2024 from $13,786 million in 2023, reflecting a rise of 6.6%[71]. - Total current liabilities increased to $14,128 million in 2024 from $11,942 million in 2023, a rise of 18.3%[71]. - Retained earnings grew to $15,297 million in 2024 from $14,773 million in 2023, an increase of 3.5%[71]. Risks and Strategic Changes - The company acknowledges potential risks including inflationary pressures, labor shortages, and supply chain challenges that may impact future performance[58]. - The company plans to realign the Strike and Surveillance Aircraft Solutions business unit from Defense Systems to Aeronautics Systems effective January 1, 2025[25]. - The company plans to realign its segments effective July 1, 2024, which will impact future reporting[84]. - Further realignment is scheduled for January 1, 2025, affecting the Strike and Surveillance Aircraft Solutions business unit[85]. - The company emphasizes the importance of free cash flow for planning acquisitions, dividends, and stock repurchases[90]. - Organic sales growth is highlighted as a key measure, excluding sales from the Training Services business[91].

Earnings Report and Estimates - Northrop Grumman Corporation (NOC) is scheduled to report fourth-quarter 2024 results on Jan 30, before market open [1] - The company delivered a four-quarter average earnings surprise of 9.91% [2] - The Zacks Consensus Estimate for sales is pegged at $11.03 billion, indicating an increase of 3.7% from the prior-year figure [8] - The Zacks Consensus Estimate for earnings is pegged at $6.27 per share, which is in line with the prior-year figure [9] Segment Performance Aeronautics Systems - Higher F-35 production volume, increased E-2 fleet sustainment and modernization work, higher Triton LRIP production volume, and an increase in Global Hawk sustainment activities are likely to have boosted the fourth-quarter revenue performance [3] - The Zacks Consensus Estimate for the segment's revenues is pegged at $3,199.4 million, indicating a rise of 9.9% from the year-ago quarter's figure [3] Defense Systems - Higher sales volumes from the Sentinel program and international ammunition sales, as well as ramp-up on the Stand-in Attack Weapon program, are likely to have aided the Defense unit's revenue performance [4] - The Zacks Consensus Estimate for Defense Systems' revenues is pegged at $2,584.4 million, indicating an increase of 57.1% from the year-ago quarter's number [4] Mission Systems - Higher sales volume from restricted advanced microelectronics programs, as well as advanced technology programs, is expected to have favorably impacted Mission Systems' revenue performance [5] - The Zacks Consensus Estimate for Mission System's fourth-quarter revenues is pegged at $3,238.4 million, indicating growth of 5.7% from the year-ago quarter's actual [5] Space Systems - The Space System segment's revenues are likely to have been adversely impacted primarily due to the wind-down of the company's work on the restricted space and NGI programs [6] - The Zacks Consensus Estimate for Space System's revenues is pegged at $2,741 million, implying a decrease of 23.9% from the year-ago quarter's number [6] Backlog and Earnings Potential - The model estimates NOC's fourth-quarter backlog to decline 3% year over year to $81.71 billion [7] - A solid top-line improvement in three of its business segments, along with favorable operating margin performance expected from the Defense Systems and Mission Systems units, is likely to have aided the overall earnings [8][9] - The proven model predicts an earnings beat for NOC this time, with an Earnings ESP of +1.37% and a Zacks Rank of 3 [10][11] Other Sector Players - Leidos Holdings, Inc (LDOS) is set to report fourth-quarter 2024 earnings on Feb 11, 2025, with an Earnings ESP of +12.08% and a Zacks Rank of 2 [12] - The Zacks Consensus Estimate for LDOS' earnings is pegged at $2.18 per share, with sales estimated at $4.12 billion, indicating year-over-year growth of 3.6% [13] - Huntington Ingalls Industries, Inc (HII) is set to report its fourth-quarter 2024 results on Feb 6, with an Earnings ESP of +8.35% and a Zacks Rank of 3 [13] - The Zacks Consensus Estimate for HII's earnings is pegged at $3.28 per share, with sales estimated at $3.03 billion [13] - CurtissWright (CW) is set to report its fourth-quarter results on Feb 12, with an Earnings ESP of +1.24% and a Zacks Rank of 3 [14] - The Zacks Consensus Estimate for CW's earnings is pegged at $3.08 per share, with sales estimated at $785.5 million [14]

Core Insights - Northrop Grumman has selected Planisware Enterprise as its enterprise-wide program management system to enhance innovation and operational excellence [1] - Planisware aims to support Northrop Grumman's digital transformation by streamlining portfolio management technology across the entire product lifecycle [2] Company Overview - Planisware is a leading B2B provider of SaaS in the rapidly growing Project Economy, focusing on transforming how organizations strategize, plan, and deliver projects [3] - The company has over 700 employees across 14 offices and serves approximately 600 clients in more than 30 countries, including large international companies, medium-sized businesses, and public sector entities [4] - Planisware is listed on the regulated market of Euronext Paris under the ticker symbol "PLNW" [4]