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Northrop Grumman Corporation (NOC - Free Report) reported fourth-quarter 2024 adjusted earnings of $6.39 per share, which beat the Zacks Consensus Estimate of $6.27 by 1.9%. The bottom line also improved significantly from a loss of $1.45 per share in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company reported GAAP earnings of $8.66 per share against GAAP loss of $3.54 in the fourth quarter of 2023.
The year-over-year improvement can be attributed to a significant improvement in operating income.
For 2024, NOC reported adjusted earnings of $26.08 per share, which beat the Zacks Consensus Estimate of $25.96 by 0.5%. The bottom line also improved from $15.61 recorded in 2023.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
NOC’s total sales of $10.69 billion in the fourth quarter missed the Zacks Consensus Estimate of $11.03 billion by 3.1%. However, the top line inched up 0.5% from $10.64 billion reported in the year-ago quarter. This improvement can be attributed to strong sales growth in its Aeronautics Systems, Defense Systems and Mission Systems segments.
For 2024, the company recorded total sales of $41.03 billion, which missed the Zacks Consensus Estimate of $41.37 billion. The top line rose 4% from $39.29 billion reported in 2023.
Backlog Count
The company’s total backlog was $91.47 billion at the end of the fourth quarter compared with $84.80 billion at the end of the third quarter.
Segmental Details
Aeronautics Systems: This segment’s sales of $3.22 billion rose 11% year over year, driven by the continuing transition to production on B-21, which resulted in higher restricted volume and an increase in F-35 production programs, largely influenced by the timing of materials.
The unit’s operating income totaled $292 million against operating loss of $1,271 million in the fourth quarter of 2023. Its operating margin also expanded to 9.1%.
Mission Systems: Sales in this segment increased 3% to $3.14 billion. This was driven by a higher volume on restricted advanced microelectronics and technology programs, as well as higher volume on communications, electronic warfare self-protection and targeting systems programs.
The unit’s operating income rose 2% to $469 million. However, the operating margin contracted 20 basis points (bps) to 14.9%.
Defense Systems: This segment’s sales rose 5% year over year to $2.33 billion. The improvement was driven by continued ramp-up on Sentinel and higher volume on certain military ammunition programs.
The unit’s operating income improved 13% year over year to $252 million. The operating margin deteriorated 80 bps to 10.8%.
Space Systems: Sales in this segment declined 13% to $2.71 billion due to the winding down of work on the restricted space and NGI programs, as well as lower volume on a restricted program, Next-Gen OPIR, and the Glide Phase Interceptor program, largely due to timing.
The segment’s operating income decreased 5% year over year to $275 million. The operating margin expanded 70 bps to 10.1%.
Operational Update
Operating income during the quarter totaled $1.19 billion, reflecting a significant improvement from $0.38 million in the prior-year quarter. This improvement was driven by higher operating income at Aeronautics Systems as well as Defense Systems.
Financial Condition
Northrop’s cash and cash equivalents as of Dec. 31, 2024, totaled $4.35 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 $4.39 billion during 2024 compared with $3.88 million a year ago.
2025 Guidance
The company issued its 2025 guidance. It expects revenues to be in the range of $42.00-$42.50 billion. The consensus estimate for sales is pegged at $42.86 billion, higher than the company’s guided range.
NOC now expects adjusted earnings to be in the band of $27.85-$28.25 per share. The consensus estimate for earnings is pegged at $27.85 per share, in line with the lower end of the company’s guidance.
Northrop projects to generate adjusted free cash flow in the band of $2.85-$3.25 billion.
Teledyne Technologies Inc. (TDY - Free Report) reported fourth-quarter 2024 adjusted earnings of $5.52 per share, which surpassed the Zacks Consensus Estimate of $5.23 by 5.5%. The bottom line also improved 1.5% from $5.44 recorded a year ago.
The company’s total sales were $1.50 billion, which beat the Zacks Consensus Estimate of $1.45 billion by 3.7%. The top line also rose 5.4% from $1.43 billion reported a year ago.
Hexcel Corporation (HXL - Free Report) reported fourth-quarter 2024 adjusted earnings of 52 cents per share, which improved 20.9% from the year-ago quarter’s figure of 43 cents. The bottom line also surpassed the Zacks Consensus Estimate of 51 cents by 2%.
The company’s net sales totaled $473.8 million, which beat the Zacks Consensus Estimate of $471 million by 0.6%. The top line also witnessed an improvement of 3.6% from the year-ago quarter’s figure of $457.5 million.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.34 per share, which beat the Zacks Consensus Estimate of $1.25 by 7.2%. However, the bottom line declined 16.3% from $1.60 in the year-ago quarter.
The company reported total revenues of $3.61 billion, which missed the Zacks Consensus Estimate of $3.74 billion by 3.5%. Moreover, revenues decreased 7.2% from the year-ago quarter’s level of $3.89 billion.
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Northrop Stock Surpasses Q4 Earnings, Misses Sales Expectations
Northrop Grumman Corporation (NOC - Free Report) reported fourth-quarter 2024 adjusted earnings of $6.39 per share, which beat the Zacks Consensus Estimate of $6.27 by 1.9%. The bottom line also improved significantly from a loss of $1.45 per share in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company reported GAAP earnings of $8.66 per share against GAAP loss of $3.54 in the fourth quarter of 2023.
The year-over-year improvement can be attributed to a significant improvement in operating income.
For 2024, NOC reported adjusted earnings of $26.08 per share, which beat the Zacks Consensus Estimate of $25.96 by 0.5%. The bottom line also improved from $15.61 recorded in 2023.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman Corporation price-consensus-eps-surprise-chart | Northrop Grumman Corporation Quote
Total Sales
NOC’s total sales of $10.69 billion in the fourth quarter missed the Zacks Consensus Estimate of $11.03 billion by 3.1%. However, the top line inched up 0.5% from $10.64 billion reported in the year-ago quarter. This improvement can be attributed to strong sales growth in its Aeronautics Systems, Defense Systems and Mission Systems segments.
For 2024, the company recorded total sales of $41.03 billion, which missed the Zacks Consensus Estimate of $41.37 billion. The top line rose 4% from $39.29 billion reported in 2023.
Backlog Count
The company’s total backlog was $91.47 billion at the end of the fourth quarter compared with $84.80 billion at the end of the third quarter.
Segmental Details
Aeronautics Systems: This segment’s sales of $3.22 billion rose 11% year over year, driven by the continuing transition to production on B-21, which resulted in higher restricted volume and an increase in F-35 production programs, largely influenced by the timing of materials.
The unit’s operating income totaled $292 million against operating loss of $1,271 million in the fourth quarter of 2023. Its operating margin also expanded to 9.1%.
Mission Systems: Sales in this segment increased 3% to $3.14 billion. This was driven by a higher volume on restricted advanced microelectronics and technology programs, as well as higher volume on communications, electronic warfare self-protection and targeting systems programs.
The unit’s operating income rose 2% to $469 million. However, the operating margin contracted 20 basis points (bps) to 14.9%.
Defense Systems: This segment’s sales rose 5% year over year to $2.33 billion. The improvement was driven by continued ramp-up on Sentinel and higher volume on certain military ammunition programs.
The unit’s operating income improved 13% year over year to $252 million. The operating margin deteriorated 80 bps to 10.8%.
Space Systems: Sales in this segment declined 13% to $2.71 billion due to the winding down of work on the restricted space and NGI programs, as well as lower volume on a restricted program, Next-Gen OPIR, and the Glide Phase Interceptor program, largely due to timing.
The segment’s operating income decreased 5% year over year to $275 million. The operating margin expanded 70 bps to 10.1%.
Operational Update
Operating income during the quarter totaled $1.19 billion, reflecting a significant improvement from $0.38 million in the prior-year quarter. This improvement was driven by higher operating income at Aeronautics Systems as well as Defense Systems.
Financial Condition
Northrop’s cash and cash equivalents as of Dec. 31, 2024, totaled $4.35 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 $4.39 billion during 2024 compared with $3.88 million a year ago.
2025 Guidance
The company issued its 2025 guidance. It expects revenues to be in the range of $42.00-$42.50 billion. The consensus estimate for sales is pegged at $42.86 billion, higher than the company’s guided range.
NOC now expects adjusted earnings to be in the band of $27.85-$28.25 per share. The consensus estimate for earnings is pegged at $27.85 per share, in line with the lower end of the company’s guidance.
Northrop projects to generate adjusted free cash flow in the band of $2.85-$3.25 billion.
Zacks Rank
NOC 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
Teledyne Technologies Inc. (TDY - Free Report) reported fourth-quarter 2024 adjusted earnings of $5.52 per share, which surpassed the Zacks Consensus Estimate of $5.23 by 5.5%. The bottom line also improved 1.5% from $5.44 recorded a year ago.
The company’s total sales were $1.50 billion, which beat the Zacks Consensus Estimate of $1.45 billion by 3.7%. The top line also rose 5.4% from $1.43 billion reported a year ago.
Hexcel Corporation (HXL - Free Report) reported fourth-quarter 2024 adjusted earnings of 52 cents per share, which improved 20.9% from the year-ago quarter’s figure of 43 cents. The bottom line also surpassed the Zacks Consensus Estimate of 51 cents by 2%.
The company’s net sales totaled $473.8 million, which beat the Zacks Consensus Estimate of $471 million by 0.6%. The top line also witnessed an improvement of 3.6% from the year-ago quarter’s figure of $457.5 million.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.34 per share, which beat the Zacks Consensus Estimate of $1.25 by 7.2%. However, the bottom line declined 16.3% from $1.60 in the year-ago quarter.
The company reported total revenues of $3.61 billion, which missed the Zacks Consensus Estimate of $3.74 billion by 3.5%. Moreover, revenues decreased 7.2% from the year-ago quarter’s level of $3.89 billion.