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Northrop Grumman(NOC) - 2025 Q1 - Quarterly Results
NOCNorthrop Grumman(NOC)2025-04-22 10:45

Financial Performance - First quarter 2025 sales decreased by 665million,or7665 million, or 7%, to 9.5 billion compared to 10.1billioninthefirstquarterof2024[6]−Netearningsforthefirstquarter2025totaled10.1 billion in the first quarter of 2024[6] - Net earnings for the first quarter 2025 totaled 481 million, or 3.32perdilutedshare,downfrom3.32 per diluted share, down from 944 million, or 6.32perdilutedshare,inthesameperiodlastyear,reflectinga496.32 per diluted share, in the same period last year, reflecting a 49% decrease[2] - Operating income decreased by 498 million, or 46%, to 573million,withanoperatingmarginratedecliningto6.1573 million, with an operating margin rate declining to 6.1% from 10.6%[7] - Total sales for the three months ended March 31, 2025, were 9,468 million, compared to 10,133millionforthesameperiodin2024,reflectingadecreaseofapproximately6.610,133 million for the same period in 2024, reflecting a decrease of approximately 6.6%[41] - Operating income for the three months ended March 31, 2025, was 573 million, down from 1,071millioninthesameperiodof2024,representingadeclineofabout46.61,071 million in the same period of 2024, representing a decline of about 46.6%[41] - Net earnings for the three months ended March 31, 2025, were 481 million, compared to 944millionin2024,indicatingadecreaseofapproximately49.1944 million in 2024, indicating a decrease of approximately 49.1%[41] - Basic earnings per share for the three months ended March 31, 2025, were 3.33, down from 6.34inthesameperiodof2024[41]CashFlowandCapitalExpenditures−Cashfromoperatingactivitiesdecreasedby6.34 in the same period of 2024[41] Cash Flow and Capital Expenditures - Cash from operating activities decreased by 859 million, or 122%, resulting in a free cash flow decline of 845million,or87845 million, or 87%[11] - Net cash used in operating activities was 1,565 million, significantly higher than 706millionintheprioryear[47]−Capitalexpendituresforthequarterwere706 million in the prior year[47] - Capital expenditures for the quarter were 256 million, slightly lower than 270millioninthesamequarterof2024[47]−Commonstockrepurchasesamountedto270 million in the same quarter of 2024[47] - Common stock repurchases amounted to 480 million, a decrease from 1,190millionintheprioryear[47]−Freecashflowiscalculatedasnetcashprovidedbyorusedinoperatingactivitieslesscapitalexpenditures[66]−Freecashflowisakeyfactorforplanningacquisitions,dividendpayments,andstockrepurchases[66]−Freecashflowshouldnotbeconsideredinisolationasameasureofresidualcashflowavailablefordiscretionarypurposes[66]−Thecompanyemphasizestheimportanceoffreecashflowasasupplementalmeasureofcashperformanceforinvestors[66]SegmentPerformance−SalesintheAeronauticsSystemssegmentdecreasedby1,190 million in the prior year[47] - Free cash flow is calculated as net cash provided by or used in operating activities less capital expenditures[66] - Free cash flow is a key factor for planning acquisitions, dividend payments, and stock repurchases[66] - Free cash flow should not be considered in isolation as a measure of residual cash flow available for discretionary purposes[66] - The company emphasizes the importance of free cash flow as a supplemental measure of cash performance for investors[66] Segment Performance - Sales in the Aeronautics Systems segment decreased by 230 million, or 8%, primarily due to lower sales on the B-21 program[16] - Defense Systems segment sales increased by 68million,or468 million, or 4%, driven by the ramp-up on the Sentinel program[19] - Mission Systems segment sales rose by 148 million, or 6%, attributed to higher sales on the Scalable Agile Beam Radar program[22] - Space Systems segment sales fell by 581million,or18581 million, or 18%, primarily due to the wind-down of work on certain restricted space programs[25] Guidance and Backlog - 2025 sales guidance is projected between 42,000 million and 42,500million,downfromapriorrangeof42,500 million, down from a prior range of 44,650 million to 44,800million[30]−Operatingincomeguidancefor2025issetbetween44,800 million[30] - Operating income guidance for 2025 is set between 4,200 million and 4,350million,revisedfromapreviousestimateof4,350 million, revised from a previous estimate of 4,650 million to 4,800million[30]−MTM−adjustedEPSguidancefor2025isexpectedtobebetween4,800 million[30] - MTM-adjusted EPS guidance for 2025 is expected to be between 24.95 and 25.35,adecreasefromthepriorrangeof25.35, a decrease from the prior range of 27.85 to 28.25[30]−Freecashflowguidancefor2025isprojectedbetween28.25[30] - Free cash flow guidance for 2025 is projected between 2,850 million and 3,250million[30]−Firstquarter2025netawardsreached3,250 million[30] - First quarter 2025 net awards reached 10.8 billion, contributing to a record backlog of 92.8billion[4]−Totalbacklogincreasedto92.8 billion[4] - Total backlog increased to 92,797 million as of March 31, 2025, reflecting a 1% growth from 91,468millionin2024[50]−AeronauticsSystemsbacklogwas91,468 million in 2024[50] - Aeronautics Systems backlog was 25,454 million, up 1% from 25,202millionyear−over−year[50]−MissionSystemsbackloggrewby725,202 million year-over-year[50] - Mission Systems backlog grew by 7% to 17,626 million from 16,443millioninthepreviousyear[50]AssetsandLiabilities−TotalassetsasofMarch31,2025,were16,443 million in the previous year[50] Assets and Liabilities - Total assets as of March 31, 2025, were 48,468 million, a decrease from 49,359millionasofDecember31,2024[44]−TotalliabilitiesasofMarch31,2025,were49,359 million as of December 31, 2024[44] - Total liabilities as of March 31, 2025, were 33,484 million, down from 34,069millionasofDecember31,2024[44]OtherFinancialMetrics−Thecompanyrecognizedapre−taxlossof34,069 million as of December 31, 2024[44] Other Financial Metrics - The company recognized a pre-tax loss of 477 million on the B-21 program, impacting diluted EPS by 2.74[2]−Theweighted−averagedilutedsharesoutstandingdecreasedto144.9millionfrom149.3millionyear−over−year[55]−ThepershareimpactoftotalnetFAS/CASpensionadjustmentwas2.74[2] - The weighted-average diluted shares outstanding decreased to 144.9 million from 149.3 million year-over-year[55] - The per share impact of total net FAS/CAS pension adjustment was 0.99, compared to $0.87 in the same period of 2024[55]