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Northrop Grumman Corporation (NOC - Free Report) reported fourth-quarter 2022 adjusted earnings of $7.50 per share, which surpassed the Zacks Consensus Estimate of $6.60 by 13.6%. The bottom line also improved 25% from the year-ago quarter’s reported earnings of $6 per share.
The company announced GAAP earnings of $13.46 per share, compared with $17.14 recorded in the fourth quarter of 2021.
For full-year 2022, the company reported adjusted earnings of $25.54 per share, which deteriorated from the year-ago figure of $25.63. The full-year bottom line, however, surpassed the Zacks Consensus Estimate of $24.65 per share.
Our model projected adjusted earnings of $6.47 per share for the fourth quarter and $24.52 per share for 2022.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
In the fourth quarter of 2022, Northrop Grumman reported total sales of $10.03 billion, which surpassed the Zacks Consensus Estimate of $9.66 billion by 3.8%. Also, sales increased by 16% from the year-ago quarter’s $8.64 billion.
The upside can be attributed to strong demand, the timing of material receipts, and continued improvement in labor availability trends.
For full-year 2022, the company recorded revenues worth $36.60 billion, up 3% from 2021’s reported figure. The full-year revenues also beat the Zacks Consensus Estimate of $36.23 billion.
Our model projected net sales of $9.63 billion for the fourth quarter and $36.20 billion for 2022.
Backlog Count
Northrop Grumman’s total backlog stood at $78.70 billion at the end of the fourth quarter of 2022 compared with $79.65 billion at the end of third-quarter 2022.
Segmental Details
Aeronautics Systems: Segment sales of $2,757 million improved 5% year over year due to higher volumes in Manned Aircraft.
The operating income went up 31% to $262 million, whereas the operating margin expanded 210 basis points (bps) to 10.5%.
Mission Systems: Segment sales increased 16% to $2,927 million due to higher restricted sales in the Networked Information Solutions business area, higher Surface Electronic Warfare Improvement Program volumes, as well as higher volume on airborne radar programs.
The operating income increased 12% to $3452 million and the operating margin contracted 50 bps to 15.4%.
Defense Systems: Sales in this segment improved 20% to $1,657 million, primarily driven by the timing of material receipts on several programs.
The operating income improved 10% to $183 million, while the operating margin contracted 110 bps to 11%.
Space Systems: This segment’s fourth-quarter 2022 sales rose 23% to $3,278 million, driven by higher sales in the Launch & Strategic Missiles as well as sales business areas.
The segment’s operating income improved 16% to $297 million, while the operating margin contracted 50 bps to 9.1%.
Operational Update
The operating income during the quarter improved 17% to $1,136 million, primarily driven by higher sales and a higher operating margin rate.
Financial Condition
Northrop Grumman’s cash and cash equivalents at the end of 2022 were $2,577 million, down from $3,530 million as of Dec 31, 2021.
The long-term debt (net of the current portion) at the end of 2022 was $11,805 million, down from $12,777 million as of Dec 31, 2021.
The net cashflow from operating activities as of Dec 31, 2022 was $2,901 million compared with the year-ago quarter’s figure of $3,567 million.
2023 Guidance
Northrop Grumman provided its financial guidance for 2023.
The company expects to generate revenues in the range of approximately $38.00-38.40 billion for 2023. The Zacks Consensus Estimate of $37.86 billion is below the company’s guided range.
Adjusted earnings are projected in the range of $21.85-$22.45 per share. The Zacks Consensus Estimate of $21.63 per share is lower than the guided range.
The company currently expects adjusted free cash flow in the range of $1.85-$2.15 billion in 2023.
Lockheed Martin Corporation (LMT - Free Report) reported fourth-quarter 2022 adjusted earnings of $7.79 per share, which surpassed the Zacks Consensus Estimate of $7.41 by 5.1%. The bottom line also improved 7.9% year over year.
In the reported quarter, net sales amounted to $19 billion, which surpassed the Zacks Consensus Estimate of $18.25 billion by 4.1%. The top line rose 7.3% from the year-ago quarter’s reported figure of $17.7 billion.
Raytheon Technologies Corporation’s (RTX - Free Report) fourth-quarter 2022 adjusted earnings per share (EPS) of $1.27 beat the Zacks Consensus Estimate of $1.24 per share by 2.4%. Moreover, the bottom line improved 18% from the year-ago quarter’s tally.
Raytheon Technologies’ fourth-quarter sales of $18,093 million missed the Zacks Consensus Estimate of $18,196 million by 0.6%. The sales figure, however, rose 6% from $17,044 million recorded in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) reported its fourth-quarter 2022 EPS of $3.58, which beat the Zacks Consensus Estimate of $3.53 per share by 1.4%. Quarterly earnings increased 5.6% from $3.39 per share in the year-ago quarter.
General Dynamics’ fourth-quarter revenues of $10,851 million beat the Zacks Consensus Estimate of $10,674 million by 1.7%. Revenues also improved 5.4% from the year-ago quarter.
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Northrop Grumman's (NOC) Q4 Earnings Beat, Sales Rise Y/Y
Northrop Grumman Corporation (NOC - Free Report) reported fourth-quarter 2022 adjusted earnings of $7.50 per share, which surpassed the Zacks Consensus Estimate of $6.60 by 13.6%. The bottom line also improved 25% from the year-ago quarter’s reported earnings of $6 per share.
The company announced GAAP earnings of $13.46 per share, compared with $17.14 recorded in the fourth quarter of 2021.
For full-year 2022, the company reported adjusted earnings of $25.54 per share, which deteriorated from the year-ago figure of $25.63. The full-year bottom line, however, surpassed the Zacks Consensus Estimate of $24.65 per share.
Our model projected adjusted earnings of $6.47 per share for the fourth quarter and $24.52 per share for 2022.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman Corporation price-consensus-eps-surprise-chart | Northrop Grumman Corporation Quote
Total Sales
In the fourth quarter of 2022, Northrop Grumman reported total sales of $10.03 billion, which surpassed the Zacks Consensus Estimate of $9.66 billion by 3.8%. Also, sales increased by 16% from the year-ago quarter’s $8.64 billion.
The upside can be attributed to strong demand, the timing of material receipts, and continued improvement in labor availability trends.
For full-year 2022, the company recorded revenues worth $36.60 billion, up 3% from 2021’s reported figure. The full-year revenues also beat the Zacks Consensus Estimate of $36.23 billion.
Our model projected net sales of $9.63 billion for the fourth quarter and $36.20 billion for 2022.
Backlog Count
Northrop Grumman’s total backlog stood at $78.70 billion at the end of the fourth quarter of 2022 compared with $79.65 billion at the end of third-quarter 2022.
Segmental Details
Aeronautics Systems: Segment sales of $2,757 million improved 5% year over year due to higher volumes in Manned Aircraft.
The operating income went up 31% to $262 million, whereas the operating margin expanded 210 basis points (bps) to 10.5%.
Mission Systems: Segment sales increased 16% to $2,927 million due to higher restricted sales in the Networked Information Solutions business area, higher Surface Electronic Warfare Improvement Program volumes, as well as higher volume on airborne radar programs.
The operating income increased 12% to $3452 million and the operating margin contracted 50 bps to 15.4%.
Defense Systems: Sales in this segment improved 20% to $1,657 million, primarily driven by the timing of material receipts on several programs.
The operating income improved 10% to $183 million, while the operating margin contracted 110 bps to 11%.
Space Systems: This segment’s fourth-quarter 2022 sales rose 23% to $3,278 million, driven by higher sales in the Launch & Strategic Missiles as well as sales business areas.
The segment’s operating income improved 16% to $297 million, while the operating margin contracted 50 bps to 9.1%.
Operational Update
The operating income during the quarter improved 17% to $1,136 million, primarily driven by higher sales and a higher operating margin rate.
Financial Condition
Northrop Grumman’s cash and cash equivalents at the end of 2022 were $2,577 million, down from $3,530 million as of Dec 31, 2021.
The long-term debt (net of the current portion) at the end of 2022 was $11,805 million, down from $12,777 million as of Dec 31, 2021.
The net cashflow from operating activities as of Dec 31, 2022 was $2,901 million compared with the year-ago quarter’s figure of $3,567 million.
2023 Guidance
Northrop Grumman provided its financial guidance for 2023.
The company expects to generate revenues in the range of approximately $38.00-38.40 billion for 2023. The Zacks Consensus Estimate of $37.86 billion is below the company’s guided range.
Adjusted earnings are projected in the range of $21.85-$22.45 per share. The Zacks Consensus Estimate of $21.63 per share is lower than the guided range.
The company currently expects adjusted free cash flow in the range of $1.85-$2.15 billion in 2023.
Zacks Rank
Northrop Grumman 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
Lockheed Martin Corporation (LMT - Free Report) reported fourth-quarter 2022 adjusted earnings of $7.79 per share, which surpassed the Zacks Consensus Estimate of $7.41 by 5.1%. The bottom line also improved 7.9% year over year.
In the reported quarter, net sales amounted to $19 billion, which surpassed the Zacks Consensus Estimate of $18.25 billion by 4.1%. The top line rose 7.3% from the year-ago quarter’s reported figure of $17.7 billion.
Raytheon Technologies Corporation’s (RTX - Free Report) fourth-quarter 2022 adjusted earnings per share (EPS) of $1.27 beat the Zacks Consensus Estimate of $1.24 per share by 2.4%. Moreover, the bottom line improved 18% from the year-ago quarter’s tally.
Raytheon Technologies’ fourth-quarter sales of $18,093 million missed the Zacks Consensus Estimate of $18,196 million by 0.6%. The sales figure, however, rose 6% from $17,044 million recorded in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) reported its fourth-quarter 2022 EPS of $3.58, which beat the Zacks Consensus Estimate of $3.53 per share by 1.4%. Quarterly earnings increased 5.6% from $3.39 per share in the year-ago quarter.
General Dynamics’ fourth-quarter revenues of $10,851 million beat the Zacks Consensus Estimate of $10,674 million by 1.7%. Revenues also improved 5.4% from the year-ago quarter.