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Northrop (NOC) Beats on Q2 Earnings, Ups '24 Sales View
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Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2024 earnings of $6.36 per share, which beat the Zacks Consensus Estimate of $5.95 by 6.9%. The bottom line also increased 19.1% from $5.34 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 $10.22 billion beat the Zacks Consensus Estimate of $10.07 billion by 1.4%. The top line also increased 6.7% from $9.58 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 $83.12 billion at the end of the second quarter of 2024 compared with $78.90 billion at the end of the first quarter.
Segmental Details
Aeronautics Systems: This segment’s sales of $2.96 billion rose 14.2% year over year due to higher restricted sales, higher volumes from the Triton program, as well as an increase in sustainment and production work for the F-35 program.
The unit’s operating income totaled $295 million compared with $278 million in the second quarter of 2023. Its operating margin, however, deteriorated 70 basis points (bps) to 10%.
Mission Systems: Sales in this segment increased 4% to $2.77 billion. This was driven by higher volume from restricted advanced microelectronics programs, the timing of materials on marine systems programs, higher volume from the Surface Electronic Warfare Improvement Program (SEWIP) and ramp-up on full-rate production (FRP) awards for the Ground/Air Task Oriented Radar (G/ATOR) program.
The unit’s operating income declined 10% to $361 million. The operating margin also contracted 220 bps to 13%.
Defense Systems: This segment’s sales rose 6.5% year over year to $1.51 billion. The improvement was driven by a ramp-up on certain military ammunition programs and the Stand-in Attack Weapon (SiAW) program. Higher volume from the Integrated Battle Command System (IBCS) program and increased order quantities on the Guided Multiple Launch Rocket System (GMLRS) also contributed to this unit’s sales growth.
The unit’s operating income rose 23% year over year to $206 million. The operating margin expanded 180 bps to 13.5%.
Space Systems: Sales in this segment rose 2% to $3.57 billion, driven by sales growth from the ramp-up of the Space Development Agency (SDA) Tranche 2 Transport Layer (T2TL) programs, increased sales from the HALO program and higher materials volume from the GEM 63 program.
The segment’s operating income increased 14% year over year to $324 million. The operating margin expanded 100 bps to 9.1%.
Operational Update
The company’s operating income during the quarter totaled $1.09 billion, up 13% from $967 million in the prior-year quarter. This improvement was driven by strong performance and cost efficiencies.
Financial Condition
Northrop’s cash and cash equivalents as of Jun 30, 2024, totaled $3.27 billion, up from $3.11 billion as of Dec 31, 2023.
Long-term debt (net of the current portion) amounted to $14.71 billion compared with $13.79 billion as of Dec 31, 2023.
Net cash flow from operating activities totaled $719 million during the first six months of 2024 compared with $219 million a year ago.
2024 Guidance
The company partially raised its 2024 guidance. NOC now expects revenues to be in the range of $41.00-$41.40 billion, up from the prior guidance of $40.80-$41.20 billion, in 2024. The consensus estimate for sales is pegged at $41.19 billion, just below the mid-point of the company’s guided range.
NOC now expects adjusted earnings to be in the band of $24.90-$25.30 per share compared with the earlier guided range of $24.45-$24.85. The consensus estimate for earnings is pegged at $24.71 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 and incur capital expenditure worth $1.80 billion.
General Dynamics Corporation (GD - Free Report) reported second-quarter 2024 earnings per share (EPS) of $3.26, which missed the Zacks Consensus Estimate of $3.30 by 1.2%. However, the figure increased 20.7% from $2.70 per share recorded in the year-ago quarter.
Revenues of $11.98 billion beat the Zacks Consensus Estimate of $11.52 billion by 3.9%. The top line also improved 18% from the prior-year reported figure.
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2024 adjusted earnings of $7.11 per share, which beat the Zacks Consensus Estimate of $6.45 by 10.2%. The bottom line also improved 5.6% from the year-ago quarter's recorded figure of $6.73.
Net sales were $18.12 billion, which surpassed the Zacks Consensus Estimate of $17.10 billion by 6%. The top line also increased 8.6% from $16.69 billion reported in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2024 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of $1.49 by 3.4%. The bottom line also improved 5.5% from the year-ago quarter’s figure of $1.46.
TXT reported total revenues of $3.53 billion, which missed the Zacks Consensus Estimate of $3.55 billion by 0.6%. However, the reported figure increased 3% from the year-ago quarter’s level of $3.42 billion.
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Northrop (NOC) Beats on Q2 Earnings, Ups '24 Sales View
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2024 earnings of $6.36 per share, which beat the Zacks Consensus Estimate of $5.95 by 6.9%. The bottom line also increased 19.1% from $5.34 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 $10.22 billion beat the Zacks Consensus Estimate of $10.07 billion by 1.4%. The top line also increased 6.7% from $9.58 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 $83.12 billion at the end of the second quarter of 2024 compared with $78.90 billion at the end of the first quarter.
Segmental Details
Aeronautics Systems: This segment’s sales of $2.96 billion rose 14.2% year over year due to higher restricted sales, higher volumes from the Triton program, as well as an increase in sustainment and production work for the F-35 program.
The unit’s operating income totaled $295 million compared with $278 million in the second quarter of 2023. Its operating margin, however, deteriorated 70 basis points (bps) to 10%.
Mission Systems: Sales in this segment increased 4% to $2.77 billion. This was driven by higher volume from restricted advanced microelectronics programs, the timing of materials on marine systems programs, higher volume from the Surface Electronic Warfare Improvement Program (SEWIP) and ramp-up on full-rate production (FRP) awards for the Ground/Air Task Oriented Radar (G/ATOR) program.
The unit’s operating income declined 10% to $361 million. The operating margin also contracted 220 bps to 13%.
Defense Systems: This segment’s sales rose 6.5% year over year to $1.51 billion. The improvement was driven by a ramp-up on certain military ammunition programs and the Stand-in Attack Weapon (SiAW) program. Higher volume from the Integrated Battle Command System (IBCS) program and increased order quantities on the Guided Multiple Launch Rocket System (GMLRS) also contributed to this unit’s sales growth.
The unit’s operating income rose 23% year over year to $206 million. The operating margin expanded 180 bps to 13.5%.
Space Systems: Sales in this segment rose 2% to $3.57 billion, driven by sales growth from the ramp-up of the Space Development Agency (SDA) Tranche 2 Transport Layer (T2TL) programs, increased sales from the HALO program and higher materials volume from the GEM 63 program.
The segment’s operating income increased 14% year over year to $324 million. The operating margin expanded 100 bps to 9.1%.
Operational Update
The company’s operating income during the quarter totaled $1.09 billion, up 13% from $967 million in the prior-year quarter. This improvement was driven by strong performance and cost efficiencies.
Financial Condition
Northrop’s cash and cash equivalents as of Jun 30, 2024, totaled $3.27 billion, up from $3.11 billion as of Dec 31, 2023.
Long-term debt (net of the current portion) amounted to $14.71 billion compared with $13.79 billion as of Dec 31, 2023.
Net cash flow from operating activities totaled $719 million during the first six months of 2024 compared with $219 million a year ago.
2024 Guidance
The company partially raised its 2024 guidance. NOC now expects revenues to be in the range of $41.00-$41.40 billion, up from the prior guidance of $40.80-$41.20 billion, in 2024. The consensus estimate for sales is pegged at $41.19 billion, just below the mid-point of the company’s guided range.
NOC now expects adjusted earnings to be in the band of $24.90-$25.30 per share compared with the earlier guided range of $24.45-$24.85. The consensus estimate for earnings is pegged at $24.71 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 and incur capital expenditure worth $1.80 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
General Dynamics Corporation (GD - Free Report) reported second-quarter 2024 earnings per share (EPS) of $3.26, which missed the Zacks Consensus Estimate of $3.30 by 1.2%. However, the figure increased 20.7% from $2.70 per share recorded in the year-ago quarter.
Revenues of $11.98 billion beat the Zacks Consensus Estimate of $11.52 billion by 3.9%. The top line also improved 18% from the prior-year reported figure.
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2024 adjusted earnings of $7.11 per share, which beat the Zacks Consensus Estimate of $6.45 by 10.2%. The bottom line also improved 5.6% from the year-ago quarter's recorded figure of $6.73.
Net sales were $18.12 billion, which surpassed the Zacks Consensus Estimate of $17.10 billion by 6%. The top line also increased 8.6% from $16.69 billion reported in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2024 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of $1.49 by 3.4%. The bottom line also improved 5.5% from the year-ago quarter’s figure of $1.46.
TXT reported total revenues of $3.53 billion, which missed the Zacks Consensus Estimate of $3.55 billion by 0.6%. However, the reported figure increased 3% from the year-ago quarter’s level of $3.42 billion.