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Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2021 earnings of $6.57 per share, which exceeded the Zacks Consensus Estimate of $5.48. Moreover, the bottom line rose 27.6% from the year-ago quarter’s $5.15.
Total Sales
Northrop Grumman reported total sales of $9,157 million for the first quarter, surpassing the Zacks Consensus Estimate of $8,528 million. Further, revenues increased 6% from the year-ago quarter’s $8,620 million. This year-over-year upside was primarily driven by increases in Aeronautics Systems sales, Space Systems sales and Mission Systems sales.
Backlog Count
Northrop Grumman’s total backlog stood at $79.3 billion at the end of first-quarter 2021 compared with the $81 billion witnessed at the end of 2020. Of the total backlog, $35.5 billion was funded.
Segmental Details
Aeronautics Systems: Segment sales of $2,990 million grew 5% year over year on higher manned aircraft sales.
Operating income improved 17% to $308 million, while operating margin expanded 100 basis points (bps) to 10.3%.
Mission Systems: Segment sales increased 10% to $2,589 million driven by higher sales volume from airborne multi-function sensors and networks, along with maritime/land systems and sensor programs.
Operating income rose 12% to $397 million, with operating margin expanding 30 bps to 15.3%.
Defense Systems: Sales at this segment declined 17% to $1,562 million due to a reduction in sales related to the IT services divestiture.
Operating income fell 11% to $177 million, while operating margin expanded 80 bps to 11.3%.
Space Systems: Space Systems’ quarterly sales increased 29% to $2,521 million owing to higher sales in both the Launch & Strategic Missiles and Space business areas.
The segment’s operating income jumped 37% to $276 million, while operating margin expanded 50 bps to 10.9%.
Operational Update
Total operating costs and expenses at the end of the first quarter were $8,315 million, up 8.2% year over year.
Operating income during the quarter surged 202.1% year over year to $2,822 million.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman’s cash and cash equivalents, as of Mar 31, 2021, were $3,517 million, down from $4,907 million, as of Dec 31, 2020.
Long-term debt (net of current portion), as of Mar 31, 2021, was $12,764 million, up from $14,261 million, as of the end of 2020.
Net cash outflow from operating activities, as of Mar 31, 2021, was $66 million compared with $993 million, as of Mar 31, 2020.
2021 Guidance
Northrop Grumman has raised its 2021 revenue and earnings guidance.
The company currently expects to generate revenues in the range of $35.3-$35.7 billion compared with the prior guided range of $35.0-$35.4 billion during 2021. The Zacks Consensus Estimate of $35.5 billion lies at the mid-point of the company’s guided range.
The company’s ongoing-year earnings are currently projected to be in the range of $24-$24.50 per share compared with the previous band of $21.80-$22.20 per share. The Zacks Consensus Estimate of $23.60 is lower than the company’s guided range.
The company estimates free cash flow of $2.20-$2.50 billion in 2021.
Zacks Rank
Northrop Grumman currently carries a Zacks Rank #4 (Sell).
Lockheed Martin Corp. (LMT - Free Report) delivered first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Raytheon Technologies Corporation’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share of 90 cents outpaced the Zacks Consensus Estimate of 88 cents.
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Northrop Grumman (NOC) Q1 Earnings Beat, Revenues Rise Y/Y
Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2021 earnings of $6.57 per share, which exceeded the Zacks Consensus Estimate of $5.48. Moreover, the bottom line rose 27.6% from the year-ago quarter’s $5.15.
Total Sales
Northrop Grumman reported total sales of $9,157 million for the first quarter, surpassing the Zacks Consensus Estimate of $8,528 million. Further, revenues increased 6% from the year-ago quarter’s $8,620 million. This year-over-year upside was primarily driven by increases in Aeronautics Systems sales, Space Systems sales and Mission Systems sales.
Backlog Count
Northrop Grumman’s total backlog stood at $79.3 billion at the end of first-quarter 2021 compared with the $81 billion witnessed at the end of 2020. Of the total backlog, $35.5 billion was funded.
Segmental Details
Aeronautics Systems: Segment sales of $2,990 million grew 5% year over year on higher manned aircraft sales.
Operating income improved 17% to $308 million, while operating margin expanded 100 basis points (bps) to 10.3%.
Mission Systems: Segment sales increased 10% to $2,589 million driven by higher sales volume from airborne multi-function sensors and networks, along with maritime/land systems and sensor programs.
Operating income rose 12% to $397 million, with operating margin expanding 30 bps to 15.3%.
Defense Systems: Sales at this segment declined 17% to $1,562 million due to a reduction in sales related to the IT services divestiture.
Operating income fell 11% to $177 million, while operating margin expanded 80 bps to 11.3%.
Space Systems: Space Systems’ quarterly sales increased 29% to $2,521 million owing to higher sales in both the Launch & Strategic Missiles and Space business areas.
The segment’s operating income jumped 37% to $276 million, while operating margin expanded 50 bps to 10.9%.
Operational Update
Total operating costs and expenses at the end of the first quarter were $8,315 million, up 8.2% year over year.
Operating income during the quarter surged 202.1% year over year to $2,822 million.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman Corporation price-consensus-eps-surprise-chart | Northrop Grumman Corporation Quote
Financial Condition
Northrop Grumman’s cash and cash equivalents, as of Mar 31, 2021, were $3,517 million, down from $4,907 million, as of Dec 31, 2020.
Long-term debt (net of current portion), as of Mar 31, 2021, was $12,764 million, up from $14,261 million, as of the end of 2020.
Net cash outflow from operating activities, as of Mar 31, 2021, was $66 million compared with $993 million, as of Mar 31, 2020.
2021 Guidance
Northrop Grumman has raised its 2021 revenue and earnings guidance.
The company currently expects to generate revenues in the range of $35.3-$35.7 billion compared with the prior guided range of $35.0-$35.4 billion during 2021. The Zacks Consensus Estimate of $35.5 billion lies at the mid-point of the company’s guided range.
The company’s ongoing-year earnings are currently projected to be in the range of $24-$24.50 per share compared with the previous band of $21.80-$22.20 per share. The Zacks Consensus Estimate of $23.60 is lower than the company’s guided range.
The company estimates free cash flow of $2.20-$2.50 billion in 2021.
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
Lockheed Martin Corp. (LMT - Free Report) delivered first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Raytheon Technologies Corporation’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share of 90 cents outpaced the Zacks Consensus Estimate of 88 cents.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>