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Northrop Beats on Q3 Earnings, Raises '24 EPS Guidance
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Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2024 earnings of $7 per share, which beat the Zacks Consensus Estimate of $6.07 by 15.3%. The bottom line also increased 13.3% from $6.18 recorded in the year-ago quarter.
The year-over-year improvement can be attributed to an increase in operating income and sales.
Total Sales
NOC’s total sales of $10 billion missed the Zacks Consensus Estimate of $10.23 billion by 2.2%. The top line also rose 2.3% from $9.78 billion reported in the year-ago quarter. This improvement can be attributed to strong sales growth from its Aeronautics Systems, Defense Systems and Mission Systems segments.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
The company’s total backlog was $84.80 billion at the end of the third quarter compared with $83.12 billion at the end of the second quarter.
Segmental Details
Aeronautics Systems: This segment’s sales of $2.88 billion rose 4% year over year. This was due to higher F-35 production volume, largely driven by the timing of materials, increased E-2 fleet sustainment and modernization work, higher Triton LRIP production volume and an increase in Global Hawk sustainment activities.
The unit’s operating income totaled $298 million compared with $283 million in the third quarter of 2023. Its operating margin also expanded 20 basis points (bps) to 10.4%.
Mission Systems: Sales in this segment increased 7.4% to $2.82 billion. This was driven by higher volume from restricted advanced microelectronics and technology programs, increased marine systems sales and improved Ground/Air Task Oriented Radar (G/ATOR) volume.
The unit’s operating income rose 1% to $390 million. However, the operating margin contracted 90 bps to 13.8%.
Defense Systems: This segment’s sales rose 2% year over year to $2.08 billion. The improvement was driven by higher volume from the Sentinel program, ramp-up of the Stand-in Attack Weapon (SiAW) program and increased volume from certain military ammunition programs.
The unit’s operating income dropped 2% year over year to $196 million. The operating margin deteriorated 40 bps to 9.4%.
Space Systems: Sales in this segment declined 3% to $2.87 billion due to wind-down of NOC’s work on the restricted space and NGI programs.
The segment’s operating income increased 14% year over year to $345 million. The operating margin expanded 180 bps to 12%.
Operational Update
Operating income during the quarter totaled $1.12 billion, up 10.2% from $1.02 million in the prior-year quarter. This improvement was driven by higher segment operating income and an increase in the FAS/CAS operating adjustment.
Financial Condition
Northrop’s cash and cash equivalents as of Sept. 30, 2024, totaled $3.33 billion, up from $3.11 billion as of Dec. 31, 2023.
Long-term debt (net of the current portion) amounted to $14.69 billion compared with $13.79 billion as of Dec. 31, 2023.
Net cash flow from operating activities totaled $1.81 billion during the first nine months of 2024 compared with $1.45 million a year ago.
2024 Guidance
The company partially raised its 2024 guidance. It continues to expect revenues in the range of $41.00-$41.40 billion. The consensus estimate for sales is pegged at $41.40 billion, in line with the higher end of the company’s guided range.
NOC now expects adjusted earnings to be in the band of $25.65-$26.05 per share, up from the earlier guided range of $24.90-$25.30. The consensus estimate for earnings is pegged at $25.16 per share, which lies below the company’s guidance.
The company still expects to generate adjusted free cash flow in the band of $2.25-$2.65 billion.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2024 adjusted earnings of 47 cents per share, which improved 23.7% from the year-ago figure of 38 cents. The bottom line also surpassed the Zacks Consensus Estimate by 2.2%.
Net sales totaled $456.5 million, which beat the Zacks Consensus Estimate of $456.2 million by 0.1%. The top line also witnessed an improvement of 8.8% from the year-ago reported sales of $419.5 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2024 adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago figure of $6.77.
Net sales were $17.10 billion, which missed the Zacks Consensus Estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.
RTX Corporation’s (RTX - Free Report) third-quarter 2024 adjusted earnings per share of $1.45 beat the Zacks Consensus Estimate of $1.33 by 9%. The bottom line also improved 16% from the year-ago level of $1.25.
RTX’s third-quarter sales totaled $20.09 billion, which surpassed the Zacks Consensus Estimate of $19.91 billion by 0.9%. The top line also surged a solid 49.2% from $13.46 billion recorded in the third quarter of 2023.
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Northrop Beats on Q3 Earnings, Raises '24 EPS Guidance
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2024 earnings of $7 per share, which beat the Zacks Consensus Estimate of $6.07 by 15.3%. The bottom line also increased 13.3% from $6.18 recorded in the year-ago quarter.
The year-over-year improvement can be attributed to an increase in operating income and sales.
Total Sales
NOC’s total sales of $10 billion missed the Zacks Consensus Estimate of $10.23 billion by 2.2%. The top line also rose 2.3% from $9.78 billion reported in the year-ago quarter. This improvement can be attributed to strong sales growth from its Aeronautics Systems, Defense Systems and Mission Systems 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 $84.80 billion at the end of the third quarter compared with $83.12 billion at the end of the second quarter.
Segmental Details
Aeronautics Systems: This segment’s sales of $2.88 billion rose 4% year over year. This was due to higher F-35 production volume, largely driven by the timing of materials, increased E-2 fleet sustainment and modernization work, higher Triton LRIP production volume and an increase in Global Hawk sustainment activities.
The unit’s operating income totaled $298 million compared with $283 million in the third quarter of 2023. Its operating margin also expanded 20 basis points (bps) to 10.4%.
Mission Systems: Sales in this segment increased 7.4% to $2.82 billion. This was driven by higher volume from restricted advanced microelectronics and technology programs, increased marine systems sales and improved Ground/Air Task Oriented Radar (G/ATOR) volume.
The unit’s operating income rose 1% to $390 million. However, the operating margin contracted 90 bps to 13.8%.
Defense Systems: This segment’s sales rose 2% year over year to $2.08 billion. The improvement was driven by higher volume from the Sentinel program, ramp-up of the Stand-in Attack Weapon (SiAW) program and increased volume from certain military ammunition programs.
The unit’s operating income dropped 2% year over year to $196 million. The operating margin deteriorated 40 bps to 9.4%.
Space Systems: Sales in this segment declined 3% to $2.87 billion due to wind-down of NOC’s work on the restricted space and NGI programs.
The segment’s operating income increased 14% year over year to $345 million. The operating margin expanded 180 bps to 12%.
Operational Update
Operating income during the quarter totaled $1.12 billion, up 10.2% from $1.02 million in the prior-year quarter. This improvement was driven by higher segment operating income and an increase in the FAS/CAS operating adjustment.
Financial Condition
Northrop’s cash and cash equivalents as of Sept. 30, 2024, totaled $3.33 billion, up from $3.11 billion as of Dec. 31, 2023.
Long-term debt (net of the current portion) amounted to $14.69 billion compared with $13.79 billion as of Dec. 31, 2023.
Net cash flow from operating activities totaled $1.81 billion during the first nine months of 2024 compared with $1.45 million a year ago.
2024 Guidance
The company partially raised its 2024 guidance. It continues to expect revenues in the range of $41.00-$41.40 billion. The consensus estimate for sales is pegged at $41.40 billion, in line with the higher end of the company’s guided range.
NOC now expects adjusted earnings to be in the band of $25.65-$26.05 per share, up from the earlier guided range of $24.90-$25.30. The consensus estimate for earnings is pegged at $25.16 per share, which lies below the company’s guidance.
The company 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
Hexcel Corporation (HXL - Free Report) reported third-quarter 2024 adjusted earnings of 47 cents per share, which improved 23.7% from the year-ago figure of 38 cents. The bottom line also surpassed the Zacks Consensus Estimate by 2.2%.
Net sales totaled $456.5 million, which beat the Zacks Consensus Estimate of $456.2 million by 0.1%. The top line also witnessed an improvement of 8.8% from the year-ago reported sales of $419.5 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2024 adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago figure of $6.77.
Net sales were $17.10 billion, which missed the Zacks Consensus Estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.
RTX Corporation’s (RTX - Free Report) third-quarter 2024 adjusted earnings per share of $1.45 beat the Zacks Consensus Estimate of $1.33 by 9%. The bottom line also improved 16% from the year-ago level of $1.25.
RTX’s third-quarter sales totaled $20.09 billion, which surpassed the Zacks Consensus Estimate of $19.91 billion by 0.9%. The top line also surged a solid 49.2% from $13.46 billion recorded in the third quarter of 2023.