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Northrop's (NOC) Q4 Earnings Beat Estimates, Sales Up Y/Y
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Northrop Grumman Corporation (NOC - Free Report) reported fourth-quarter 2023 adjusted earnings of $6.27 per share, which beat the Zacks Consensus Estimate of $5.75 by 9%. However, the bottom line decreased from $7.50 per share recorded in the year-ago quarter.
The company incurred a GAAP loss of $3.54 per share, which deteriorated from earnings of $13.46 generated in the fourth quarter of 2022.
Northrop Grumman reported 2023 adjusted earnings of $23.29 per share, which surpassed the Zacks Consensus Estimate of $22.76 by 2.3%. However, the bottom line decreased 8.8% from $25.54 per share recorded a year ago.
Total Sales
NOC’s total sales of $10.64 billion beat the Zacks Consensus Estimate of $10.44 billion by 1.9%. The top line also increased 6% from $10.03 billion in the year-ago quarter. This improvement can be attributed to the strong demand for its products and services.
Total sales were $39.29 billion in 2023, which beat the Zacks Consensus Estimate of $39.12 billion by 0.4%. The top line also rose 7% from $36.60 billion reported in 2022.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
The company’s total backlog was $84.23 billion at the end of the fourth quarter of 2023 compared with $83.93 billion at the end of the third quarter of 2023.
Segmental Details
Aeronautics Systems: This segment’s sales of $2,910 million rose 6% year over year due to higher volumes from restricted programs as well as Triton and E-2 programs.
The unit’s operating loss was $1,271 million against operating income of $289 million in the fourth quarter of 2022.
Mission Systems: Sales in this segment increased 5% to $3,063 million. This was driven by higher restricted sales in the advanced microelectronics programs and higher volumes from the marine systems program.
The unit’s operating income increased 2% to $462 million, while the operating margin contracted 30 basis points (bps) to 15.1%.
Defense Systems: This segment’s sales fell 1% to $1,645 million. This was due to a decrease in sales from the Integrated Air and Missile Defense Battle Command System.
The unit’s operating income rose 10% to $202 million, while the operating margin expanded 130 bps to 12.3%.
Space Systems: Sales in this segment rose 10% to $3,602 million, driven by higher volumes from the Space Development Agency and Next-Generation Overhead Persistent Infrared Polar programs.
The segment’s operating income increased 2% to $304 million, while the operating margin contracted 70 bps to 8.4%.
Operational Update
The company’s operating loss during the quarter was $393 million, indicating significant deterioration from operating income of $906 million in the prior-year quarter. This deterioration was due to lower operating income in the Aeronautics System segment on account of a charge on the low-rate initial production phase of the B-21 program.
Financial Condition
Northrop’s cash and cash equivalents as of Dec 31, 2023, were $3,109 million, up from $2,577 million as of Dec 31, 2022.
Long-term debt (net of the current portion) was $13,786 million compared with $11,805 million as of Dec 31, 2022.
Northrop’s net cash flow from operating activities for the full year ended Dec 31, 2023, was $3,875 million compared with $2,901 million in the previous year.
2024 Guidance
The company expects revenues in the range of $40.80-$41.20 billion for 2024. The Zacks Consensus Estimate is pegged at $41.08 billion, which is just above the mid-point of the company’s guided sales.
The company projects adjusted earnings in the range of $24.45-$24.85 per share. The Zacks Consensus Estimate is pegged at $24.11 per share, which lies lower than the company’s guided range.
NOC expects to generate adjusted free cash flow in the band of $2.25-$2.65 billion.
Lockheed Martin Corporation (LMT - Free Report) reported fourth-quarter 2023 adjusted earnings of $7.90 per share, which beat the Zacks Consensus Estimate of $7.26 by 8.8%. The bottom line also improved 1.4% from the year-ago quarter's recorded figure.
Net sales were $18.87 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $17.98 billion by 4.9%. The top line, however, decreased 0.6% from $18.99 billion reported in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2023 earnings per share of $3.64, which missed the Zacks Consensus Estimate of $3.66 by 0.6%. However, the figure increased 1.7% from $3.58 per share recorded in the year-ago quarter.
In the quarter under review, revenues of $11,668 million beat the Zacks Consensus Estimate of $11,543 million by 1.1%. The top line also improved 7.5% from the prior-year reported figure.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2023 adjusted earnings of $1.60 per share, which surpassed the Zacks Consensus Estimate of $1.53 by 4.6%. The bottom line also improved 30.1% from the year-ago quarter’s recorded figure.
TXT reported total revenues of $3,892 million, which missed the Zacks Consensus Estimate of $3,917.6 million by 0.7%. However, the reported figure increased 7% from the year-ago quarter’s level of $3,636 million.
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Northrop's (NOC) Q4 Earnings Beat Estimates, Sales Up Y/Y
Northrop Grumman Corporation (NOC - Free Report) reported fourth-quarter 2023 adjusted earnings of $6.27 per share, which beat the Zacks Consensus Estimate of $5.75 by 9%. However, the bottom line decreased from $7.50 per share recorded in the year-ago quarter.
The company incurred a GAAP loss of $3.54 per share, which deteriorated from earnings of $13.46 generated in the fourth quarter of 2022.
Northrop Grumman reported 2023 adjusted earnings of $23.29 per share, which surpassed the Zacks Consensus Estimate of $22.76 by 2.3%. However, the bottom line decreased 8.8% from $25.54 per share recorded a year ago.
Total Sales
NOC’s total sales of $10.64 billion beat the Zacks Consensus Estimate of $10.44 billion by 1.9%. The top line also increased 6% from $10.03 billion in the year-ago quarter. This improvement can be attributed to the strong demand for its products and services.
Total sales were $39.29 billion in 2023, which beat the Zacks Consensus Estimate of $39.12 billion by 0.4%. The top line also rose 7% from $36.60 billion reported in 2022.
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 $84.23 billion at the end of the fourth quarter of 2023 compared with $83.93 billion at the end of the third quarter of 2023.
Segmental Details
Aeronautics Systems: This segment’s sales of $2,910 million rose 6% year over year due to higher volumes from restricted programs as well as Triton and E-2 programs.
The unit’s operating loss was $1,271 million against operating income of $289 million in the fourth quarter of 2022.
Mission Systems: Sales in this segment increased 5% to $3,063 million. This was driven by higher restricted sales in the advanced microelectronics programs and higher volumes from the marine systems program.
The unit’s operating income increased 2% to $462 million, while the operating margin contracted 30 basis points (bps) to 15.1%.
Defense Systems: This segment’s sales fell 1% to $1,645 million. This was due to a decrease in sales from the Integrated Air and Missile Defense Battle Command System.
The unit’s operating income rose 10% to $202 million, while the operating margin expanded 130 bps to 12.3%.
Space Systems: Sales in this segment rose 10% to $3,602 million, driven by higher volumes from the Space Development Agency and Next-Generation Overhead Persistent Infrared Polar programs.
The segment’s operating income increased 2% to $304 million, while the operating margin contracted 70 bps to 8.4%.
Operational Update
The company’s operating loss during the quarter was $393 million, indicating significant deterioration from operating income of $906 million in the prior-year quarter. This deterioration was due to lower operating income in the Aeronautics System segment on account of a charge on the low-rate initial production phase of the B-21 program.
Financial Condition
Northrop’s cash and cash equivalents as of Dec 31, 2023, were $3,109 million, up from $2,577 million as of Dec 31, 2022.
Long-term debt (net of the current portion) was $13,786 million compared with $11,805 million as of Dec 31, 2022.
Northrop’s net cash flow from operating activities for the full year ended Dec 31, 2023, was $3,875 million compared with $2,901 million in the previous year.
2024 Guidance
The company expects revenues in the range of $40.80-$41.20 billion for 2024. The Zacks Consensus Estimate is pegged at $41.08 billion, which is just above the mid-point of the company’s guided sales.
The company projects adjusted earnings in the range of $24.45-$24.85 per share. The Zacks Consensus Estimate is pegged at $24.11 per share, which lies lower than the company’s guided range.
NOC 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
Lockheed Martin Corporation (LMT - Free Report) reported fourth-quarter 2023 adjusted earnings of $7.90 per share, which beat the Zacks Consensus Estimate of $7.26 by 8.8%. The bottom line also improved 1.4% from the year-ago quarter's recorded figure.
Net sales were $18.87 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $17.98 billion by 4.9%. The top line, however, decreased 0.6% from $18.99 billion reported in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2023 earnings per share of $3.64, which missed the Zacks Consensus Estimate of $3.66 by 0.6%. However, the figure increased 1.7% from $3.58 per share recorded in the year-ago quarter.
In the quarter under review, revenues of $11,668 million beat the Zacks Consensus Estimate of $11,543 million by 1.1%. The top line also improved 7.5% from the prior-year reported figure.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2023 adjusted earnings of $1.60 per share, which surpassed the Zacks Consensus Estimate of $1.53 by 4.6%. The bottom line also improved 30.1% from the year-ago quarter’s recorded figure.
TXT reported total revenues of $3,892 million, which missed the Zacks Consensus Estimate of $3,917.6 million by 0.7%. However, the reported figure increased 7% from the year-ago quarter’s level of $3,636 million.