Northrop Grumman(NOC) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter 2024 sales were $10.7 billion, comparable to Q4 2023, with full-year sales increasing 4$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$4,370 million, significantly higher than $2,537 million in 2023, marking an increase of 72.5$4,174 million, compared to $2,056 million in 2023, reflecting a growth of 102$28.39, up from $13.57 in 2023, indicating a year-over-year increase of 109$4.4 billion, with free cash flow of $2.6 billion, representing a 25$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$2,514 million in 2024, compared to $1,500 million in 2023, indicating a 67.6$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$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].