Northrop Grumman Corporation (NYSE:NOC) Barclays 41st Annual Industrial Select Conference 2024 February 22, 2024 9:10 AM ET Company Participants Dave Keffer - CFO Kathy Warden - Chair, CEO and President Conference Call Participants David Strauss - Barclays David Strauss So, we'll get started with our next session. We have Northrop Grumman here. We have Kathy Warden, Chair and CEO; and Dave Keffer, CFO. So, Dave is going to kick it off with obligatory comments, and then we'll get straight into Q&A. Dave Kef ...

Northrop Grumman Corporation Conference Call Summary Company Overview - **Company**: Northrop Grumman Corporation (NYSE:NOC) - **Date**: February 22, 2024 - **Participants**: Kathy Warden (Chair, CEO), Dave Keffer (CFO), David Strauss (Barclays) Key Industry Insights - **Defense Spending**: There is strong bipartisan support for defense spending in Washington, with expectations that the continuing resolution will likely extend into April 2024. The company does not foresee a material impact from potential sequestration [4][3]. - **Growth Projections**: Northrop Grumman is guiding for a growth rate of 4% to 5% for 2024, which is a moderation from the 7% growth achieved in 2023. This is attributed to a tougher comparison base but still reflects strong underlying growth [6][5]. Financial Performance and Guidance - **Sales Growth**: The company has averaged around 5% growth over the last several years, with a strong performance in 2023. The guidance for 2024 reflects a solid growth outlook despite some program declines [6][7]. - **Employee Growth**: Northrop Grumman added approximately 6,500 employees in 2023, bringing the total workforce to over 100,000. The company plans to continue hiring in 2024 [9][8]. Program and Contract Management - **Fixed Price Contracts**: The company has maintained discipline in fixed-price development contracts, learning from past experiences. A rigorous internal review process is in place to ensure successful execution [11][12]. - **B-21 Program**: The B-21 program is seen as balanced in terms of opportunities and risks. The company is committed to delivering within the established program estimates [14][16]. Growth Drivers - **Sector Performance**: All four business segments are projected to grow in 2024, with particular strength in Defense Systems (weapons and munitions), Mission Systems (cyber technologies), Aeronautics (B-21 and F-35), and Space (Sentinel and SDA portfolio) [18][19]. - **Defense Systems**: The tactical weapons portfolio is growing double digits, although there are headwinds from a significant training program concluding in 2024 [21][20]. Margin and Cost Management - **Margin Outlook**: The company expects to see a gradual shift from cost-plus to fixed-price contracts, which typically have higher margins. The mix is projected to shift from 53% cost-type contracts in 2023 to around 45% over the next several years [29][30]. - **Space Segment Margins**: Space margins have been impacted by cost-type development work, but there is an expectation for improvement as these programs transition to production [34][33]. Challenges and Opportunities - **HALO Program**: The HALO program, part of the Artemis architecture, is undergoing negotiations with NASA due to evolving requirements. The company is working on a change proposal to cover additional costs incurred [38][39]. - **Balance Sheet Management**: The company has taken on additional debt but maintains a strong balance sheet with minimal pension funding requirements. Capital expenditures are projected to decrease, providing flexibility for shareholder returns [41][42]. Conclusion - Northrop Grumman is positioned for continued growth in a supportive defense spending environment, with a focus on disciplined contract management and strategic hiring. The company is navigating challenges in specific programs while capitalizing on opportunities across its diverse portfolio.

Northrop Grumman (NOC) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a cha ...

ROY, Utah, Feb. 20, 2024 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE:NOC) successfully completed tests of several crucial elements of the Sentinel intercontinental ballistic missile (ICBM), marking significant progress for the program in its engineering, manufacturing and development phase. Forward and aft sections of a Sentinel ICBM missile were evaluated through a rigorous test campaign at the company's Strategic Missile Test and Production Complex in Promontory, Utah. The tests lower risk for ...

FALLS CHURCH, Va., Feb. 15, 2024 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE:NOC) will participate in the Barclays 41st annual Industrials Select Conference on Thursday, February 22. Kathy Warden, chair, chief executive officer and president, and Dave Keffer, corporate vice president and chief financial officer, will present beginning at 9:10 a.m. Eastern time. The presentation will be webcast live at http://investor.northropgrumman.com. Northrop Grumman is a leading global aerospace and defense ...

FALLS CHURCH, Va., Feb. 13, 2024 (GLOBE NEWSWIRE) -- The board of directors of Northrop Grumman Corporation (NYSE:NOC) declared a quarterly dividend of $1.87 per share on Northrop Grumman common stock, payable March 13, 2024, to shareholders of record as of the close of business February 26, 2024. Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries ...

Northrop Grumman (NOC 0.82%) likes its stock. I mean, really likes it.In December last year, the defense major's board of directors roughly tripled the amount of Northrop Grumman stock that the company was authorized to buy back, to $3.8 billion. Then, just last week, the company further announced that it will "accelerate" that buyback plan by buying a $1 billion slug of its shares all at one go. Inquiring investors want to know: What's the hurry? Why the sudden inspiration to buy so many shares, and all at ...

HUNTSVILLE, Ala., Feb. 01, 2024 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE:NOC) delivered the first production Integrated Battle Command System (IBCS) major end item, an Integrated Collaborative Environment (ICE), to the U.S. Army on December 19, 2023. Working at an accelerated pace, the Northrop Grumman team will deliver additional major end items in early 2024 to support the Army's aggressive modernization schedule. As part of the Low-Rate Initial Production award, Northrop Grumman is producin ...

HUNTSVILLE, Ala., Jan. 31, 2024 (GLOBE NEWSWIRE) -- The Northrop Grumman Corporation (NYSE:NOC) Next Generation Interceptor team completed its All-Up Round (AUR) Preliminary Design Review (PDR), in partnership with the Missile Defense Agency (MDA) on January 26. Meeting the demands of the mission, the Northrop Grumman Next Generation Interceptor team continues to accelerate the progress on deploying a critical homeland defense capability to the U.S. warfighter. Northrop Grumman's Next Generation Interceptor ...

CAPE CANAVERAL, Fla., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation's (NYSE:NOC) Cygnus cargo delivery spacecraft was successfully launched to the International Space Station today by SpaceX's Falcon 9 rocket from Space Launch Complex 40 at Cape Canaveral Space Force Station in Florida. This is the company's 20th resupply mission, designated as NG-20. Northrop Grumman's Cygnus spacecraft for the NG-20 cargo delivery mission to the International Space Station launched from Cape Canaveral Sp ...