Northrop Stock Surpasses Q4 Earnings, Misses Sales Expectations

Northrop Grumman Corporation NOC 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 QuoteTotal SalesNOC’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 CountThe 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 DetailsAeronautics 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 UpdateOperating 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 ConditionNorthrop’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 GuidanceThe 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 RankNOC 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 ReleasesTeledyne Technologies Inc. TDY 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 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 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.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Northrop Grumman Corporation (NOC): Free Stock Analysis Report Textron Inc. (TXT): Free Stock Analysis Report Hexcel Corporation (HXL): Free Stock Analysis Report Teledyne Technologies Incorporated (TDY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks