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Northrop (NOC) Beats on Q3 Earnings, Ups '23 Sales View
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Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2023 earnings of $6.18 per share, which beat the Zacks Consensus Estimate of $5.81 by 6.4%. The bottom line also increased 5% from $5.89 per share recorded in the year-ago quarter.
Total Sales
NOC’s total sales of $9.78 billion beat the Zacks Consensus Estimate of $9.67 billion by 1.1%. The top line also increased 9% from $8.97 billion in the year-ago quarter. This improvement can be attributed to the strong demand for its products and services.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
The company’s total backlog was pegged at $83.93 billion at the end of the third quarter of 2023 compared with $78.81 billion at the end of the second quarter of 2023.
Segmental Details
Aeronautics Systems: This segment’s sales of $2,766 million rose 9% year over year due to higher volumes of Manned Aircraft.
The unit’s operating income went up 8% to $283 million, whereas the operating margin contracted 10 basis points (bps) to 10.2%.
Mission Systems: Sales in this segment increased 7% to $2,628 million. This was due to higher restricted sales in the Networked Information Solutions business area and higher volumes on the marine systems program.
The unit’s operating income increased 5% to $386 million, while the operating margin contracted 30 bps to 14.7%.
Defense Systems: This segment’s sales increased 6% to $1,421 million. This was driven by higher sales volumes from Battle Management & Missile Systems.
The unit’s operating income rose 15% to $182 million, while the operating margin expanded 110 bps to 12.8%.
Space Systems: Sales in this segment rose 11% to $3,506 million, driven by higher sales from the Launch & Strategic Missiles and Space business areas.
The segment’s operating income increased 8% to $312 million, while the operating margin contracted 30 bps to 8.9%.
Operational Update
The company’s operating income during the quarter improved 20% to $1,016 million due to higher segment operating income, lower unallocated corporate expenses and a reduction in the FAS/CAS operating adjustment.
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Sep 30, 2023 were $2,082 million, down from $2,577 million as of Dec 31, 2022.
Long-term debt (net of the current portion) was $13,793 million compared with $11,805 million as of Dec 31, 2022.
Northrop’s net cash flow from operating activities as of Sep 30, 2023 was $1,445 million compared with $650 million as of Sep 30, 2022.
2023 Guidance
Northrop Grumman raised sales guidance for 2023 and reaffirmed its other financial guidance.
The company currently expects revenues of $39 billion, up from the earlier guidance range of $38.40-$38.80 billion for 2023. The Zacks Consensus Estimate is pegged at $38.76 billion, which is lower than the company’s guided sales.
The company continues to expect adjusted earnings in the range of $22.45-$22.85 per share. The Zacks Consensus Estimate is pegged at $22.68 per share, which lies higher than the midpoint of the company’s guided range.
NOC continues to expect adjusted free cash flow in the range of $1.85-$2.15 billion.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago earnings of 33 cents per share.
In the third quarter, net sales totaled $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line witnessed an improvement of 15% from the year-ago quarter’s $365 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2023 adjusted earnings of $6.77 per share, which beat the Zacks Consensus Estimate of $6.66 by 1.7%. However, the bottom line deteriorated 1.5% from the year-ago quarter's recorded figure.
Net sales were $16.88 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line rose 1.8% from $16.58 billion reported in the year-ago quarter.
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2024 adjusted earnings of 78 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents by 6.9%. Earnings surged 27.9% from the year-ago quarter.
In the quarter under review, AAR generated net sales worth $549.7 million. The reported figure surpassed the Zacks Consensus Estimate by 8.7% and increased 23.2% from $446.3 million recorded in the year-ago quarter.
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Northrop (NOC) Beats on Q3 Earnings, Ups '23 Sales View
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2023 earnings of $6.18 per share, which beat the Zacks Consensus Estimate of $5.81 by 6.4%. The bottom line also increased 5% from $5.89 per share recorded in the year-ago quarter.
Total Sales
NOC’s total sales of $9.78 billion beat the Zacks Consensus Estimate of $9.67 billion by 1.1%. The top line also increased 9% from $8.97 billion in the year-ago quarter. This improvement can be attributed to the strong demand for its products and services.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman Corporation price-consensus-eps-surprise-chart | Northrop Grumman Corporation Quote
Backlog Count
The company’s total backlog was pegged at $83.93 billion at the end of the third quarter of 2023 compared with $78.81 billion at the end of the second quarter of 2023.
Segmental Details
Aeronautics Systems: This segment’s sales of $2,766 million rose 9% year over year due to higher volumes of Manned Aircraft.
The unit’s operating income went up 8% to $283 million, whereas the operating margin contracted 10 basis points (bps) to 10.2%.
Mission Systems: Sales in this segment increased 7% to $2,628 million. This was due to higher restricted sales in the Networked Information Solutions business area and higher volumes on the marine systems program.
The unit’s operating income increased 5% to $386 million, while the operating margin contracted 30 bps to 14.7%.
Defense Systems: This segment’s sales increased 6% to $1,421 million. This was driven by higher sales volumes from Battle Management & Missile Systems.
The unit’s operating income rose 15% to $182 million, while the operating margin expanded 110 bps to 12.8%.
Space Systems: Sales in this segment rose 11% to $3,506 million, driven by higher sales from the Launch & Strategic Missiles and Space business areas.
The segment’s operating income increased 8% to $312 million, while the operating margin contracted 30 bps to 8.9%.
Operational Update
The company’s operating income during the quarter improved 20% to $1,016 million due to higher segment operating income, lower unallocated corporate expenses and a reduction in the FAS/CAS operating adjustment.
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Sep 30, 2023 were $2,082 million, down from $2,577 million as of Dec 31, 2022.
Long-term debt (net of the current portion) was $13,793 million compared with $11,805 million as of Dec 31, 2022.
Northrop’s net cash flow from operating activities as of Sep 30, 2023 was $1,445 million compared with $650 million as of Sep 30, 2022.
2023 Guidance
Northrop Grumman raised sales guidance for 2023 and reaffirmed its other financial guidance.
The company currently expects revenues of $39 billion, up from the earlier guidance range of $38.40-$38.80 billion for 2023. The Zacks Consensus Estimate is pegged at $38.76 billion, which is lower than the company’s guided sales.
The company continues to expect adjusted earnings in the range of $22.45-$22.85 per share. The Zacks Consensus Estimate is pegged at $22.68 per share, which lies higher than the midpoint of the company’s guided range.
NOC continues to expect adjusted free cash flow in the range of $1.85-$2.15 billion.
Zacks Rank
Northrop currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation (HXL - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago earnings of 33 cents per share.
In the third quarter, net sales totaled $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line witnessed an improvement of 15% from the year-ago quarter’s $365 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2023 adjusted earnings of $6.77 per share, which beat the Zacks Consensus Estimate of $6.66 by 1.7%. However, the bottom line deteriorated 1.5% from the year-ago quarter's recorded figure.
Net sales were $16.88 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line rose 1.8% from $16.58 billion reported in the year-ago quarter.
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2024 adjusted earnings of 78 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents by 6.9%. Earnings surged 27.9% from the year-ago quarter.
In the quarter under review, AAR generated net sales worth $549.7 million. The reported figure surpassed the Zacks Consensus Estimate by 8.7% and increased 23.2% from $446.3 million recorded in the year-ago quarter.