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Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2024 earnings of $6.32 per share, which beat the Zacks Consensus Estimate of $5.83 by 8.4%. The bottom line increased 15% from $5.50 recorded in the year-ago quarter.
The year-over-year improvement can be attributed to an increase in operating income, as well as an increase in the non-operating FAS pension benefit.
Total Sales
NOC’s total sales of $10.13 billion beat the Zacks Consensus Estimate of $9.78 billion by 3.6%. The top line also increased 8.9% from $9.30 billion reported in the year-ago quarter. This improvement can be attributed to strong sales growth from each of its four segments.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
The company’s total backlog was $78.90 billion at the end of the first quarter of 2024, compared with $84.23 billion at the end of the fourth quarter of 2023.
Segmental Details
Aeronautics Systems: This segment’s sales of $2.97 billion rose 18% year over year due to higher volumes from restricted programs, as well as Triton, E-2, Global Hawk and F-35 programs.
The unit’s operating income totaled $297 million compared with $237 million in the first quarter of 2023. Its operating margin improved 60 basis points (bps) to 12.5%.
Mission Systems: Sales in this segment increased 4% to $2.67 billion. This was driven by higher restricted sales from advanced microelectronics programs.
The unit’s operating income increased 5% to $378 million, while the operating margin contracted 20 bps to 14.2%.
Defense Systems: This segment’s sales rose 3% year over year to $1.41 billion. The sales improvement was driven by a ramp-up on the Stand-in Attack Weapon (SiAW) program, a higher volume of Guided Multiple Launch Rocket Systems (GMLRS), and certain military ammunition and cannon systems programs.
The unit’s operating income rose 11% to $177 million, while the operating margin expanded 90 bps to 12.5%.
Space Systems: Sales in this segment rose 9% to $3.66 billion, driven by sales growth from Space Development Agency (SDA) Tranche 2 Transport Layer (T2TL) programs, restricted programs, Commercial Resupply Services (CRS) missions, hypersonics programs and the Glide Phase Interceptor (GPI) program.
The segment’s operating income increased 6% to $332 million, while the operating margin contracted 20 bps to 9.1%.
Operational Update
The company’s operating income during the quarter totaled $1.07 billion, up 13.1% from $947 million in the prior-year quarter. This improvement was driven by higher segment operating income and a benefit associated with the FAS/CAS operating adjustment.
Financial Condition
Northrop’s cash and cash equivalents as of Mar 31, 2024, totaled $3.06 billion, down from $3.11 billion as of Dec 31, 2023.
Long-term debt (net of the current portion) amounted to $14.74 billion compared with $13.79 billion as of Dec 31, 2023.
Northrop’s net cash outflow from operating activities totaled $706 million compared with $702 million a year ago.
2024 Guidance
The company reiterated its 2024 guidance. NOC still expects revenues in the range of $40.80-$41.20 billion for 2024. The top-line estimate is pegged at $41.09 billion, which lies above the mid-point of the company’s guided range.
The company continues to expect adjusted earnings in the band of $24.45-$24.85 per share. The bottom-line estimate is pegged at $24.67, which lies above the mid-point of the company’s guided range.
NOC still expects to generate adjusted free cash flow in the band of $2.25-$2.65 billion.
RTX Corporation’s (RTX - Free Report) first-quarter 2024 adjusted earnings per share (EPS) of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
RTX’s first-quarter net sales were $19,305 million, which surpassed the Zacks Consensus Estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2024 adjusted earnings of $6.33 per share, which beat the Zacks Consensus Estimate of $5.80 by 9.1%. The bottom line, however, declined 1.6% from the year-ago quarter's recorded figure of $6.43.
LMT’s net sales were $17.20 billion, which surpassed the Zacks Consensus Estimate of $16.19 billion by 6.2%. The top line also increased 13.7% from $15.13 billion reported in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2024 adjusted earnings of 44 cents per share, which came in line with the Zacks Consensus Estimate.
In the first quarter, the company’s net sales were $472.3 million, which missed the Zacks Consensus Estimate of $475 million by 0.6%. However, the top line witnessed an improvement of 3.2% from the year-ago quarter’s reported figure of $457.7 million.
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Northrop (NOC) Q1 Earnings Beat Estimates, Sales Rise Y/Y
Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2024 earnings of $6.32 per share, which beat the Zacks Consensus Estimate of $5.83 by 8.4%. The bottom line increased 15% from $5.50 recorded in the year-ago quarter.
The year-over-year improvement can be attributed to an increase in operating income, as well as an increase in the non-operating FAS pension benefit.
Total Sales
NOC’s total sales of $10.13 billion beat the Zacks Consensus Estimate of $9.78 billion by 3.6%. The top line also increased 8.9% from $9.30 billion reported in the year-ago quarter. This improvement can be attributed to strong sales growth from each of its four segments.
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 $78.90 billion at the end of the first quarter of 2024, compared with $84.23 billion at the end of the fourth quarter of 2023.
Segmental Details
Aeronautics Systems: This segment’s sales of $2.97 billion rose 18% year over year due to higher volumes from restricted programs, as well as Triton, E-2, Global Hawk and F-35 programs.
The unit’s operating income totaled $297 million compared with $237 million in the first quarter of 2023. Its operating margin improved 60 basis points (bps) to 12.5%.
Mission Systems: Sales in this segment increased 4% to $2.67 billion. This was driven by higher restricted sales from advanced microelectronics programs.
The unit’s operating income increased 5% to $378 million, while the operating margin contracted 20 bps to 14.2%.
Defense Systems: This segment’s sales rose 3% year over year to $1.41 billion. The sales improvement was driven by a ramp-up on the Stand-in Attack Weapon (SiAW) program, a higher volume of Guided Multiple Launch Rocket Systems (GMLRS), and certain military ammunition and cannon systems programs.
The unit’s operating income rose 11% to $177 million, while the operating margin expanded 90 bps to 12.5%.
Space Systems: Sales in this segment rose 9% to $3.66 billion, driven by sales growth from Space Development Agency (SDA) Tranche 2 Transport Layer (T2TL) programs, restricted programs, Commercial Resupply Services (CRS) missions, hypersonics programs and the Glide Phase Interceptor (GPI) program.
The segment’s operating income increased 6% to $332 million, while the operating margin contracted 20 bps to 9.1%.
Operational Update
The company’s operating income during the quarter totaled $1.07 billion, up 13.1% from $947 million in the prior-year quarter. This improvement was driven by higher segment operating income and a benefit associated with the FAS/CAS operating adjustment.
Financial Condition
Northrop’s cash and cash equivalents as of Mar 31, 2024, totaled $3.06 billion, down from $3.11 billion as of Dec 31, 2023.
Long-term debt (net of the current portion) amounted to $14.74 billion compared with $13.79 billion as of Dec 31, 2023.
Northrop’s net cash outflow from operating activities totaled $706 million compared with $702 million a year ago.
2024 Guidance
The company reiterated its 2024 guidance. NOC still expects revenues in the range of $40.80-$41.20 billion for 2024. The top-line estimate is pegged at $41.09 billion, which lies above the mid-point of the company’s guided range.
The company continues to expect adjusted earnings in the band of $24.45-$24.85 per share. The bottom-line estimate is pegged at $24.67, which lies above the mid-point of the company’s guided range.
NOC still expects to generate adjusted free cash flow in the band of $2.25-$2.65 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
RTX Corporation’s (RTX - Free Report) first-quarter 2024 adjusted earnings per share (EPS) of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
RTX’s first-quarter net sales were $19,305 million, which surpassed the Zacks Consensus Estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2024 adjusted earnings of $6.33 per share, which beat the Zacks Consensus Estimate of $5.80 by 9.1%. The bottom line, however, declined 1.6% from the year-ago quarter's recorded figure of $6.43.
LMT’s net sales were $17.20 billion, which surpassed the Zacks Consensus Estimate of $16.19 billion by 6.2%. The top line also increased 13.7% from $15.13 billion reported in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2024 adjusted earnings of 44 cents per share, which came in line with the Zacks Consensus Estimate.
In the first quarter, the company’s net sales were $472.3 million, which missed the Zacks Consensus Estimate of $475 million by 0.6%. However, the top line witnessed an improvement of 3.2% from the year-ago quarter’s reported figure of $457.7 million.