Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2022 earnings of $5.89 per share, which missed the Zacks Consensus Estimate of $6.09 by 3.3%. The bottom line declined by 11.2% from the $6.63 reported in the year-ago quarter.
Total Sales
In the third quarter of 2022, Northrop Grumman reported total sales of $9 billion, which missed the Zacks Consensus Estimate of $9.15 billion by 1.6%. However, sales increased by 3% from the year-ago quarter’s $8.7 billion.
The upside can be attributed to strong demand and improving trends in labor availability.
Organic sales dropped 1% year over year, primarily due to lower sales in the Aeronautics Systems, Defense Systems and Mission Systems segments.
Backlog Count
Northrop Grumman’s total backlog stood at $79.65 billion at the end of the third quarter of 2022 compared with $79.98 billion at the second-quarter 2022 end.
Segmental Details
Aeronautics Systems: Segment sales of $2,537 million declined 7% year over year due to lower volumes in both Manned Aircraft and Autonomous Systems.
The operating income went down 1% to $262 million, whereas the operating margin expanded 60 basis points (bps) to 10.3%.
Mission Systems: Segment sales increased 1% to $2,456 million due to higher restricted sales in the Networked Information Solutions business area as well as higher Surface Electronic Warfare Improvement Program volumes.
The operating income decreased 1% to $368 million, and the operating margin contracted 30 bps to 15%.
Defense Systems: Sales in this segment declined 5% to $1,345 million, primarily due to the completion of a Joint Services support program, the lower scope of an international training program, and the winding down of the UKAWACS and JSTARS programs.
The operating income declined 10% to $158 million, while the operating margin contracted 70 bps to 11.7%.
Space Systems: Third-quarter 2022 sales rose 18% to $3,163 million, driven by higher sales in the Launch & Strategic Missiles business area due to a ramp-up in development programs.
The segment’s operating income improved 1% to $290 million. However, the operating margin contracted 150 bps to 9.2%.
Operational Update
The operating income during the quarter declined 19% to $844 million, primarily due to a reduction in the FAS/CAS operating adjustment.
Financial Condition
Northrop Grumman’s cash and cash equivalents at the end of the third quarter of 2022 were $1,666 million, down from $3,530 million as of Dec 31, 2021.
The long-term debt (net of the current portion) at the end of the third quarter of 2022 was $11,803 million, down from $12,777 million as of Dec 31, 2021.
The net cash outflow from operating activities as of Sep 30, 2022 was $1,335 million compared with the year-ago quarter figure of $1,163 million.
2022 Guidance
Northrop Grumman reaffirmed its financial guidance for 2022.
The company still expects to generate revenues in the range of approximately $36.2-36.6 billion for 2022. The Zacks Consensus Estimate of $36.35 billion is in line with the midpoint of the company’s guided range.
Adjusted earnings are still projected in the range of $24.50-$25.10 per share. The Zacks Consensus Estimate of $24.73 is lower than the midpoint of the guided range.
The company continues to expect adjusted free cash flow in the range of $1.50-$1.80 billion in 2022.
Zacks Rank
Northrop Grumman currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Teledyne Technologies Inc. (TDY - Free Report) reported third-quarter 2022 adjusted earnings of $4.54 per share, which surpassed the Zacks Consensus Estimate of $4.30 by 5.6%. The bottom line improved 4.6% from the year-ago quarter’s $4.34 per share.
Total sales in the third quarter amounted to $1,363.3 million, which came in line with the Zacks Consensus Estimate. The top line improved 3.9% from the $1,311.9 million reported a year ago.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2022 adjusted earnings per share of $1.21 beat the Zacks Consensus Estimate of $1.11 by 9%. However, the bottom line dropped 4% from the year-ago quarter’s adjusted earnings of $1.26.
Raytheon Technologies’ third-quarter sales of $16,951 million missed the Zacks Consensus Estimate of $17,003 million by 0.3%. However, the sales figure rose 5% from the $16,213 million recorded in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 32 cents by 3.1%. The bottom line improved massively from the year-ago earnings of 8 cents per share, reflecting growth of a solid 153.8%.
Hexcel’s net sales totaled $364.7 million in the third quarter, which lagged the Zacks Consensus Estimate of $391 million by 6.8%. However, the top line witnessed an improvement of 9.3% from the year-ago quarter’s $333.8 million.
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Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2022 earnings of $5.89 per share, which missed the Zacks Consensus Estimate of $6.09 by 3.3%. The bottom line declined by 11.2% from the $6.63 reported in the year-ago quarter.
Total Sales
In the third quarter of 2022, Northrop Grumman reported total sales of $9 billion, which missed the Zacks Consensus Estimate of $9.15 billion by 1.6%. However, sales increased by 3% from the year-ago quarter’s $8.7 billion.
The upside can be attributed to strong demand and improving trends in labor availability.
Organic sales dropped 1% year over year, primarily due to lower sales in the Aeronautics Systems, Defense Systems and Mission Systems segments.
Backlog Count
Northrop Grumman’s total backlog stood at $79.65 billion at the end of the third quarter of 2022 compared with $79.98 billion at the second-quarter 2022 end.
Segmental Details
Aeronautics Systems: Segment sales of $2,537 million declined 7% year over year due to lower volumes in both Manned Aircraft and Autonomous Systems.
The operating income went down 1% to $262 million, whereas the operating margin expanded 60 basis points (bps) to 10.3%.
Mission Systems: Segment sales increased 1% to $2,456 million due to higher restricted sales in the Networked Information Solutions business area as well as higher Surface Electronic Warfare Improvement Program volumes.
The operating income decreased 1% to $368 million, and the operating margin contracted 30 bps to 15%.
Defense Systems: Sales in this segment declined 5% to $1,345 million, primarily due to the completion of a Joint Services support program, the lower scope of an international training program, and the winding down of the UKAWACS and JSTARS programs.
The operating income declined 10% to $158 million, while the operating margin contracted 70 bps to 11.7%.
Space Systems: Third-quarter 2022 sales rose 18% to $3,163 million, driven by higher sales in the Launch & Strategic Missiles business area due to a ramp-up in development programs.
The segment’s operating income improved 1% to $290 million. However, the operating margin contracted 150 bps to 9.2%.
Operational Update
The operating income during the quarter declined 19% to $844 million, primarily due to a reduction in the FAS/CAS operating adjustment.
Financial Condition
Northrop Grumman’s cash and cash equivalents at the end of the third quarter of 2022 were $1,666 million, down from $3,530 million as of Dec 31, 2021.
The long-term debt (net of the current portion) at the end of the third quarter of 2022 was $11,803 million, down from $12,777 million as of Dec 31, 2021.
The net cash outflow from operating activities as of Sep 30, 2022 was $1,335 million compared with the year-ago quarter figure of $1,163 million.
2022 Guidance
Northrop Grumman reaffirmed its financial guidance for 2022.
The company still expects to generate revenues in the range of approximately $36.2-36.6 billion for 2022. The Zacks Consensus Estimate of $36.35 billion is in line with the midpoint of the company’s guided range.
Adjusted earnings are still projected in the range of $24.50-$25.10 per share. The Zacks Consensus Estimate of $24.73 is lower than the midpoint of the guided range.
The company continues to expect adjusted free cash flow in the range of $1.50-$1.80 billion in 2022.
Zacks Rank
Northrop Grumman currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Teledyne Technologies Inc. (TDY - Free Report) reported third-quarter 2022 adjusted earnings of $4.54 per share, which surpassed the Zacks Consensus Estimate of $4.30 by 5.6%. The bottom line improved 4.6% from the year-ago quarter’s $4.34 per share.
Total sales in the third quarter amounted to $1,363.3 million, which came in line with the Zacks Consensus Estimate. The top line improved 3.9% from the $1,311.9 million reported a year ago.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2022 adjusted earnings per share of $1.21 beat the Zacks Consensus Estimate of $1.11 by 9%. However, the bottom line dropped 4% from the year-ago quarter’s adjusted earnings of $1.26.
Raytheon Technologies’ third-quarter sales of $16,951 million missed the Zacks Consensus Estimate of $17,003 million by 0.3%. However, the sales figure rose 5% from the $16,213 million recorded in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 32 cents by 3.1%. The bottom line improved massively from the year-ago earnings of 8 cents per share, reflecting growth of a solid 153.8%.
Hexcel’s net sales totaled $364.7 million in the third quarter, which lagged the Zacks Consensus Estimate of $391 million by 6.8%. However, the top line witnessed an improvement of 9.3% from the year-ago quarter’s $333.8 million.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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