Financial Data and Key Metrics Changes - First quarter sales were $9.5 billion, down 7% compared to the prior year, impacted by fewer working days and contracting delays [27][28] - The company updated its 2025 financial guidance, reaffirming its outlook for sales and free cash flow [8][40] - Earnings per share were lower primarily due to the B21 adjustment, totaling $2.74 per share on an after-tax basis [36] Business Line Data and Key Metrics Changes - Aeronautics sales decreased by 8% year-over-year due to lower B-21 sales and timing issues with mature programs like F-35 [29] - Defense Systems (DS) first quarter sales increased by 4%, driven by the Sentinel program and military ammunition [30] - Mission Systems sales grew by 6%, attributed to various programs including SABR and international ground-based radar [30] - Space sales were lower due to the wind down of two programs, totaling approximately $230 million in year-over-year headwinds [31] Market Data and Key Metrics Changes - International sales represented approximately 14% of total sales, with international sales up 11% in the quarter [20][40] - The first quarter international book-to-bill ratio was 1.45 times, indicating strong demand for international bookings [20] - Poland signed a $745 million letter of acceptance for 200 ARGM-ER missiles, contributing to growth potential [21] Company Strategy and Development Direction - The company aims to compete in global markets through technology differentiation and innovation [22] - A total of $13.5 billion has been invested in R&D and infrastructure over the last five years to enhance capabilities [22] - The strategy includes expanding market presence and optimizing performance for sustainable growth [25] Management's Comments on Operating Environment and Future Outlook - The management noted strong demand signals from global customers, resulting in a record backlog of $92.8 billion [7] - The U.S. defense budget environment is evolving, with expectations of increased defense spending due to a continuing resolution [16][17] - The administration's commitment to national security funding is expected to remain strong, with potential additional funding of up to $150 billion [17][18] Other Important Information - The company experienced a pre-tax loss of $477 million related to the B21 program due to higher manufacturing costs [9] - The divestiture of the training service business is on track to close mid-year [41] Q&A Session Summary Question: What milestones should be watched for the B21 program? - Management discussed the completion of the EMD phase and ongoing tests to prove aircraft performance, with low-rate initial production underway [48][49] Question: How confident is the company about the profitability of the Sentinel program? - Management expressed confidence in the design and restructuring of the program, working with the Air Force to reduce costs and schedule [76] Question: What is the anticipated cash impact from the B21 EAC adjustment? - The cash impact will be spread primarily through 2026, 2027, and 2028, with no material impact expected for 2025 [66] Question: How does the company view the impact of tariffs on its portfolio? - The company sources a small part of its supply chain from outside the U.S., and most costs due to trade policy are covered under contracts with the U.S. government [82][83] Question: What is the outlook for international sales growth? - The company expects continued growth in international sales, driven by a significant pipeline of demand and various programs [144]

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Northrop Grumman (NOC) came out with quarterly earnings of $6.06 per share, missing the Zacks Consensus Estimate of $6.21 per share. This compares to earnings of $6.32 per share a year ago. These figures are adjusted for ...

Core Viewpoint - Northrop Grumman, a U.S. defense contractor, has lowered its earnings forecast for the year due to rising costs associated with the next-generation B-21 stealth bomber, resulting in a significant drop in first-quarter profits [1] Financial Performance - The company reported a 47% decline in earnings per share for the first quarter, primarily attributed to new loss provisions related to the B-21 program [1] - Following the announcement, Northrop Grumman's stock price fell nearly 10% in pre-market trading [1]

Group 1 - U.S. stock futures are higher, with Dow futures gaining around 300 points [1] - Northrop Grumman Corporation reported quarterly earnings of $6.06 per share, missing the analyst consensus estimate of $6.26 per share [2] - Northrop Grumman's quarterly sales were $9.468 billion, which also missed the analyst consensus estimate of $9.936 billion [2] - Following the earnings report, Northrop Grumman shares fell 8.5% to $485.99 in pre-market trading [2] Group 2 - USA Rare Earth, Inc. shares dipped 9.3% to $10.65 in pre-market trading [3] - Tyra Biosciences, Inc. declined 7.3% to $8.40 in pre-market trading [3] - National Energy Services Reunited Corp. shares dipped 6.9% to $5.60 in pre-market trading [3] - Celcuity Inc. declined 6.1% to $9.81 in pre-market trading [3] - SITE Centers Corp. shares fell 5.7% to $11.01 in pre-market trading [3] - Halliburton Company declined 5.7% to $20.67 following first-quarter results [3] - Five Point Holdings, LLC declined 5.3% to $4.61 in pre-market trading [3]

Core Viewpoint - Northrop Grumman Corporation has released its first quarter 2025 financial results, indicating ongoing performance in the aerospace and defense sector [1]. Group 1: Financial Results - The financial results for the first quarter of 2025 have been made available through the company's Form 8-K filing and on its investor relations website [1]. - A webcast of the earnings conference call is scheduled for 9:30 a.m. Eastern time, providing further insights into the financial performance [2]. Group 2: Company Overview - Northrop Grumman is recognized as a leading global aerospace and defense technology company, focusing on providing innovative solutions to meet customer needs [3]. - The company emphasizes its commitment to solving complex problems for its customers and advancing human exploration [3].

Financial Performance - First quarter 2025 sales decreased by $665 million, or 7%, to $9.5 billion compared to $10.1 billion in the first quarter of 2024[6] - Net earnings for the first quarter 2025 totaled $481 million, or $3.32 per diluted share, down from $944 million, or $6.32 per diluted share, in the same period last year, reflecting a 49% decrease[2] - Operating income decreased by $498 million, or 46%, to $573 million, with an operating margin rate declining to 6.1% from 10.6%[7] - Total sales for the three months ended March 31, 2025, were $9,468 million, compared to $10,133 million for the same period in 2024, reflecting a decrease of approximately 6.6%[41] - Operating income for the three months ended March 31, 2025, was $573 million, down from $1,071 million in the same period of 2024, representing a decline of about 46.6%[41] - Net earnings for the three months ended March 31, 2025, were $481 million, compared to $944 million in 2024, indicating a decrease of approximately 49.1%[41] - Basic earnings per share for the three months ended March 31, 2025, were $3.33, down from $6.34 in the same period of 2024[41] Cash Flow and Capital Expenditures - Cash from operating activities decreased by $859 million, or 122%, resulting in a free cash flow decline of $845 million, or 87%[11] - Net cash used in operating activities was $1,565 million, significantly higher than $706 million in the prior year[47] - Capital expenditures for the quarter were $256 million, slightly lower than $270 million in the same quarter of 2024[47] - Common stock repurchases amounted to $480 million, a decrease from $1,190 million in the prior year[47] - Free cash flow is calculated as net cash provided by or used in operating activities less capital expenditures[66] - Free cash flow is a key factor for planning acquisitions, dividend payments, and stock repurchases[66] - Free cash flow should not be considered in isolation as a measure of residual cash flow available for discretionary purposes[66] - The company emphasizes the importance of free cash flow as a supplemental measure of cash performance for investors[66] Segment Performance - Sales in the Aeronautics Systems segment decreased by $230 million, or 8%, primarily due to lower sales on the B-21 program[16] - Defense Systems segment sales increased by $68 million, or 4%, driven by the ramp-up on the Sentinel program[19] - Mission Systems segment sales rose by $148 million, or 6%, attributed to higher sales on the Scalable Agile Beam Radar program[22] - Space Systems segment sales fell by $581 million, or 18%, primarily due to the wind-down of work on certain restricted space programs[25] Guidance and Backlog - 2025 sales guidance is projected between $42,000 million and $42,500 million, down from a prior range of $44,650 million to $44,800 million[30] - Operating income guidance for 2025 is set between $4,200 million and $4,350 million, revised from a previous estimate of $4,650 million to $4,800 million[30] - MTM-adjusted EPS guidance for 2025 is expected to be between $24.95 and $25.35, a decrease from the prior range of $27.85 to $28.25[30] - Free cash flow guidance for 2025 is projected between $2,850 million and $3,250 million[30] - First quarter 2025 net awards reached $10.8 billion, contributing to a record backlog of $92.8 billion[4] - Total backlog increased to $92,797 million as of March 31, 2025, reflecting a 1% growth from $91,468 million in 2024[50] - Aeronautics Systems backlog was $25,454 million, up 1% from $25,202 million year-over-year[50] - Mission Systems backlog grew by 7% to $17,626 million from $16,443 million in the previous year[50] Assets and Liabilities - Total assets as of March 31, 2025, were $48,468 million, a decrease from $49,359 million as of December 31, 2024[44] - Total liabilities as of March 31, 2025, were $33,484 million, down from $34,069 million as of December 31, 2024[44] Other Financial Metrics - The company recognized a pre-tax loss of $477 million on the B-21 program, impacting diluted EPS by $2.74[2] - The weighted-average diluted shares outstanding decreased to 144.9 million from 149.3 million year-over-year[55] - The per share impact of total net FAS/CAS pension adjustment was $0.99, compared to $0.87 in the same period of 2024[55]

Core Viewpoint - Northrop Grumman Corporation (NOC) is expected to report its first-quarter 2025 results on April 22, with a projected earnings per share (EPS) of $6.27, reflecting a 0.8% decline year-over-year. The overall revenue is estimated at $10.05 billion, indicating a slight decrease of 0.8% from the previous year, primarily due to a downturn in the Space Systems segment [1][7][9]. Revenue Performance by Segment - **Aeronautics Systems**: Anticipated revenue of $3,171.5 million, representing a 6.8% increase from the prior year, driven by higher production volumes of B-21 and F-35 aircraft, and increased sustainment work [2][4]. - **Defense Systems**: Expected revenue of $1,886.1 million, showing a significant growth of 33.6% year-over-year, supported by higher sales from the Sentinel program and international ammunition sales [3]. - **Mission Systems**: Projected revenue of $2,763.4 million, indicating a growth of 3.9% from the previous year, bolstered by increased sales in advanced microelectronics and marine systems [4]. - **Space Systems**: Estimated revenue of $2,657.9 million, reflecting a decline of 27.3% year-over-year, primarily due to the wind-down of work on restricted space and NGI programs [5]. Backlog and Operational Insights - The backlog for NOC is projected to increase by 16.5% year-over-year to $91.98 billion, indicating strong future demand [6]. - Despite the decline in the Space Systems segment, the overall performance is expected to benefit from favorable operating margins due to efficiency initiatives and international growth [8]. Earnings Prediction and Market Position - The Zacks Consensus Estimate indicates a potential earnings miss for NOC, with an Earnings ESP of -2.74% and a Zacks Rank of 3 (Hold), suggesting a cautious outlook for the upcoming earnings report [10][11].

Core Viewpoint - Northrop Grumman (NOC) is expected to report quarterly earnings of $6.27 per share, reflecting a 0.8% decline year-over-year, with revenues forecasted at $10.05 billion, also down 0.8% from the previous year [1] Earnings Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts' reassessment of their projections [1][2] - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock [2] Key Metrics Forecast - Analysts predict 'Sales- Mission Systems' at $2.76 billion, a year-over-year increase of 3.9% [4] - 'Sales- Aeronautics Systems' is expected to reach $3.17 billion, reflecting a 6.8% increase year-over-year [4] - 'Sales- Space Systems' is forecasted to decline to $2.66 billion, a significant decrease of 27.3% year-over-year [4] Operating Income Projections - 'Sales- Defense Systems' is anticipated to reach $1.89 billion, marking a 33.6% increase from the prior-year quarter [5] - 'Operating income (loss)- Defense Systems' is expected at $182.36 million, up from $177 million in the same quarter last year [5] - 'Operating income (loss)- Mission Systems' is forecasted at $398.01 million, compared to $378 million in the previous year [5] - 'Operating income (loss)- Space Systems' is estimated at $285.17 million, down from $332 million year-over-year [6] - 'Operating income (loss)- Aeronautics Systems' is projected at $303.28 million, slightly up from $297 million in the same quarter last year [6] - 'Segment operating income adjustment- FAS/CAS operating adjustment' is expected to be $64.69 million, a significant increase from $6 million in the same quarter last year [7] Stock Performance - Northrop Grumman shares have increased by 8.1% over the past month, contrasting with the Zacks S&P 500 composite's decline of 4.2% [8] - The company holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [8]

Core Viewpoint - Northrop Grumman is outperforming Boeing in the defense sector, particularly in the development of stealth aircraft, raising questions about the relative investment potential of their stocks [1][6]. Group 1: Boeing's Recent Developments - Boeing won a $20 billion contract to build the U.S. Air Force's first sixth-generation stealth fighter, the F-47, announced by President Trump [2]. - Following the announcement, Boeing's stock peaked at $182 but has since dropped over 10%, raising concerns about investor confidence despite the contract's potential value [2][3]. - Historical performance issues, such as Boeing's struggles with the KC-46 Pegasus program, have led to skepticism regarding its ability to manage large contracts effectively [4][5]. Group 2: Northrop Grumman's Performance - Northrop Grumman has been recognized for its effective management of a $55 billion contract to produce 100 B-21 stealth bombers, achieving cost reductions of $1 billion and projecting total costs to be 28% below initial forecasts [7][9]. - The B-21 program is reportedly on schedule, with the first prototype completed in late 2022 and initial production starting in January 2024 [9]. - Northrop Grumman's financial metrics are favorable compared to Boeing, with trailing earnings of $4.2 billion and positive free cash flow of $2.6 billion, while Boeing reported negative earnings and cash flow [12]. Group 3: Investment Considerations - Investors may favor Northrop Grumman over Boeing due to its profitability, lower debt levels, and the fact that it pays a dividend, unlike Boeing [12]. - The potential for Boeing to face cost overruns on the F-47 contract could lead the Air Force to reconsider its contracts in favor of Northrop Grumman [10].

Core Viewpoint - The market anticipates a year-over-year decline in Northrop Grumman's earnings due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Northrop Grumman is expected to report quarterly earnings of $6.29 per share, reflecting a -0.5% change year-over-year, with revenues projected at $10.07 billion, down 0.6% from the previous year [3]. - The consensus EPS estimate has been revised 0.04% higher in the last 30 days, indicating a slight positive adjustment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Northrop Grumman is lower than the consensus estimate, resulting in an Earnings ESP of -3.21%, indicating bearish sentiment among analysts [10][11]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3, which increases the likelihood of a positive surprise [8]. Historical Performance - Northrop Grumman has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +1.91% in the most recent quarter [12][13]. Conclusion - Northrop Grumman does not appear to be a compelling candidate for an earnings beat based on current estimates and sentiment, but other factors should also be considered when evaluating the stock ahead of its earnings release [16].