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Northrop Stock Surpasses Q4 Earnings, Misses Sales Expectations
NOCNorthrop Grumman(NOC) ZACKS·2025-01-30 18:11

Core Insights - Northrop Grumman Corporation (NOC) reported strong fourth-quarter 2024 adjusted earnings of 6.39pershare,exceedingtheZacksConsensusEstimateof6.39 per share, exceeding the Zacks Consensus Estimate of 6.27 by 1.9% and significantly improving from a loss of 1.45pershareinthesamequarterlastyear[1][2]−Thecompanyachievedtotalsalesof1.45 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 11.03billionby3.111.03 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 26.08pershare,surpassingtheZacksConsensusEstimateof26.08 per share, surpassing the Zacks Consensus Estimate of 25.96 by 0.5% and improving from 15.61in2023[2]FinancialPerformance−NOC′sGAAPearningsforthefourthquarterwere15.61 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 3.54inthefourthquarterof2023[2]−Thecompany′stotalsalesfor2024reached3.54 in the fourth quarter of 2023 [2] - The company's total sales for 2024 reached 41.03 billion, missing the Zacks Consensus Estimate of 41.37billion,butrepresentinga441.37 billion, but representing a 4% increase from 39.29 billion in 2023 [4] - Operating income for the fourth quarter totaled 1.19billion,anotableimprovementfrom1.19 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 3.22billion,withoperatingincomerisingto3.22 billion, with operating income rising to 292 million from a loss of 1,271millioninthefourthquarterof2023[6]−MissionSystemssegmentsalesgrewby31,271 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 469million,althoughtheoperatingmargincontractedby20basispointsto14.9469 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 252million,despiteadeteriorationinoperatingmarginby80basispointsto10.8252 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 275million,althoughtheoperatingmarginexpandedby70basispointsto10.1275 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 84.80billionattheendofthethirdquarter[5]−AsofDecember31,2024,thecompany′scashandcashequivalentstotaled84.80 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 3.11billionayearearlier,whilelong−termdebtincreasedto3.11 billion a year earlier, while long-term debt increased to 14.69 billion from 13.79billion[11]2025Guidance−NOCprovidedguidancefor2025,expectingrevenuesintherangeof13.79 billion [11] 2025 Guidance - NOC provided guidance for 2025, expecting revenues in the range of 42.00-42.50billion,withtheconsensusestimateat42.50 billion, with the consensus estimate at 42.86 billion [12] - The company anticipates adjusted earnings between 27.85−27.85-28.25 per share, aligning with the lower end of the consensus estimate of 27.85pershare[12]−NOCprojectsadjustedfreecashflowtobeintherangeof27.85 per share [12] - NOC projects adjusted free cash flow to be in the range of 2.85-$3.25 billion for 2025 [12]