Tue, Apr 22, 8:04 PM (31 days ago)
**Northrop Grumman Corporation (NOC) Q1 2025 Financial Performance Summary** **Financial Health and Performance:** - **Revenue:** $9.47 billion (down 7% YoY from $10.13 billion). - **Operating Income:** $573 million (down 46% YoY from $1.07 billion). - **Net Earnings:** $481 million (down 49% YoY from $944 million). - **Earnings per Share (EPS):** $3.32 (down 47% YoY from $6.32). - **Operating Margin:** 6.1% (down from 10.6% YoY). - **Effective Tax Rate:** 16.8% (up from 16.5% YoY). **Cash Flow:** - **Net Cash Used in Operations:** $(1.57 billion) (down from $(706 million) YoY). - **Free Cash Flow:** $(1.82 billion) (down from $(976 million) YoY). **Segment Performance:** - **Aeronautics Systems:** Sales down 8% to $2.81 billion, operating loss of $183 million due to B-21 program loss. - **Defense Systems:** Sales up 4% to $1.81 billion, operating income up 15% to $179 million. - **Mission Systems:** Sales up 6% to $2.81 billion, operating income down 4% to $361 million. - **Space Systems:** Sales down 18% to $2.57 billion, operating income down 14% to $283 million. **Key Trends and Uncertainties:** - **B-21 Program:** Additional $477 million loss recognized due to higher manufacturing costs. - **Sentinel Program:** Undergoing Nunn-McCurdy breach review, certified for continuation. - **Global Security Environment:** Increased demand for defense products due to geopolitical tensions. - **Economic Environment:** Inflationary pressures, supply chain disruptions, and labor shortages impacting costs and schedules. - **Regulatory Environment:** Potential impacts from executive orders and changes in defense acquisition processes. **Future Operations Impact:** - **Backlog:** $92.8 billion, with significant new awards in Q1. - **Liquidity:** $1.7 billion in cash and cash equivalents, with sufficient liquidity for short-term and long-term needs. - **Share Repurchases:** $1.8 billion spent under the 2023 Repurchase Program, $0.7 billion remaining. **Conclusion:** Northrop Grumman's Q1 2025 performance was impacted by significant losses in the B-21 program and lower sales in the Space Systems segment. Despite these challenges, the company maintains a strong backlog and liquidity position, with ongoing investments in advanced technologies and a focus on winning key programs. The global security environment presents both opportunities and risks, with increased demand for defense products but also potential disruptions from geopolitical tensions and economic factors.