Financial Performance - First quarter sales decreased by 7% from $10.133 billion in 2024 to $9.468 billion in 2025[16] - Segment operating income decreased by 49% from $1.104 billion in 2024 to $568 million in 2025[17] - Q1 2025 Diluted EPS was $3.32, compared to $6.32 in Q1 2024[19] - Free cash flow decreased by 87% from negative $976 million in 2024 to negative $1.821 billion in 2025[43] Guidance - The company expects 2025 organic sales growth of 3% to 4%[12] - The company expects 2025 free cash flow growth of 16% at the midpoint[12] - Sales guidance for 2025 is $42 billion to $42.5 billion[21] - Free cash flow guidance for 2025 is $2.85 billion to $3.25 billion[21] Segment Performance - Aeronautics Systems sales decreased by 8% from $3.044 billion to $2.814 billion, with a significant B-21 adjustment impacting operating income[16, 17] - Space Systems sales decreased by 18% from $3.149 billion to $2.568 billion[16]

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 recognized an additional $477 million pre-tax loss related to the B21 program, affecting the overall segment operating margin rate, which dropped to 6% [9][32] - 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 production timing on mature programs like F-35 [29] - Defense Systems (DS) first quarter sales increased by $68 million, or 4%, driven by the Sentinel program and military ammunition [30] - Mission Systems sales grew by $148 million, or 6%, due to various programs including SABR and international ground-based radar [30] - Space sales were lower primarily 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] - 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 has invested $13.5 billion in R&D and infrastructure over the last five years [22] - The strategy includes leveraging hardware and software capabilities to develop next-generation systems and partnering with leading companies in AI [24] - The company is focused on driving innovation, 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 finalized continuing resolution [16][17] - The administration's fiscal year 2026 budget request is expected to maintain strong commitment to national security funding [18] Other Important Information - The company expects mid-single-digit organic growth in 2025 sales, reaffirming guidance of $42 billion to $42.5 billion [39] - The divestiture of the training service business is on track to close mid-year [41] - The company anticipates a gradual ramp in overall segment margin rates driven by strong program performance and cost-saving initiatives [44] 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: What gives confidence that the situation with U.S. customers will improve? - Management noted that award decisions are starting to move forward, expecting improvements in the second quarter and throughout the year [61][64] 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 confident should investors feel about the profitability of the Sentinel program? - Management expressed confidence in the design and restructuring of the program, which is cost-plus, and noted that they are working with the Air Force to reduce costs [76] Question: How does the company view the impact of tariffs on its portfolio? - Management indicated that tariffs impact a small part of the supply chain and most costs are covered under contracts with the U.S. government, posing no significant risk [82][83] Question: What is the outlook for international sales growth? - Management expects continued growth in international sales, driven by a significant pipeline of demand and various programs [141][144]

Core Viewpoint - Northrop Grumman Corporation (NOC) reported disappointing first-quarter 2025 financial results, with adjusted earnings and total sales missing consensus estimates, primarily due to increased manufacturing costs and lower sales in key segments [1][3][2]. Financial Performance - Adjusted earnings for Q1 2025 were $6.06 per share, missing the Zacks Consensus Estimate of $6.21 by 2.4% [1] - GAAP earnings were reported at $3.32 per share, down from $6.32 in the same quarter last year [1] - Total sales amounted to $9.47 billion, falling short of the Zacks Consensus Estimate of $9.91 billion by 4.4% and declining 6.6% from $10.13 billion year-over-year [3] Segment Performance - **Aeronautics Systems**: Sales decreased 7.6% to $2.81 billion, with an operating loss of $183 million compared to an operating income of $306 million in Q1 2024 [5] - **Mission Systems**: Sales increased 5.6% to $2.81 billion, but operating income decreased 4.5% to $361 million [6] - **Defense Systems**: Sales rose 3.9% to $1.81 billion, with operating income improving 14.7% to $179 million [7] - **Space Systems**: Sales declined 18.5% to $2.57 billion, with operating income decreasing 14.2% to $283 million [8] Operational Metrics - Total operating income for the quarter was $573 million, significantly down from $1,071 million in the prior-year quarter [10] - The company's total backlog increased to $92.80 billion from $91.47 billion at the end of Q4 2024 [4] Financial Condition - Cash and cash equivalents as of March 31, 2025, were $1.69 billion, down from $4.35 billion at the end of 2024 [11] - Long-term debt decreased to $14.17 billion from $14.69 billion [11] - Net cash outflow from operating activities was $1.57 billion, compared to $0.71 billion a year ago [11] Guidance - Northrop Grumman expects revenues for 2025 to be in the range of $42.00-$42.50 billion, with a consensus estimate of $42.27 billion [12] - Adjusted earnings guidance was lowered to a range of $24.95-$25.35 per share, down from the previous guidance of $27.85-$28.25 [13] - The company still projects adjusted free cash flow between $2.85-$3.25 billion [13]

Core Viewpoint - Northrop Grumman's stock experienced significant sell-offs following disappointing first-quarter results, with a notable decline in share price despite a positive market backdrop [1][2]. Financial Performance - The company reported earnings per share (EPS) of $6.06 on sales of $9.47 billion, missing analyst expectations of $6.26 EPS and $9.94 billion in sales [3]. - Revenue decreased by 7% year-over-year, attributed to weaker performance in space systems and aeronautics systems [3]. Segment Performance - Defense systems sales increased by 4%, driven by products like the Sentinel intercontinental ballistic missile, while the aeronautics segment saw an 8% decline due to reduced demand for the B-21 bomber [4]. - The space segment experienced an 18% drop in sales compared to the previous year, linked to lower demand for classified projects and next-generation missile initiatives [4]. Future Guidance - Management maintained its full-year sales guidance between $42 billion and $42.5 billion and free cash flow between $2.85 billion and $3.25 billion, but lowered EPS expectations to a range of $24.95 to $25.35, down from $27.85 to $28.25 [5]. - The performance shortfall and reduced earnings outlook have led investors to reassess the company's narrative, particularly regarding its position in the space industry [6].

Core Insights - Northrop Grumman reported $9.47 billion in revenue for Q1 2025, a year-over-year decline of 6.6% and below the Zacks Consensus Estimate of $9.91 billion, resulting in a surprise of -4.44% [1] - The company's EPS for the same period was $6.06, down from $6.32 a year ago, with an EPS surprise of -2.42% compared to the consensus estimate of $6.21 [1] Financial Performance Metrics - Mission Systems sales were $2.81 billion, exceeding the six-analyst average estimate of $2.75 billion, reflecting a year-over-year increase of 5.6% [4] - Aeronautics Systems sales were $2.81 billion, below the average estimate of $3.14 billion, showing a year-over-year decline of 5.2% [4] - Space Systems sales were $2.57 billion, under the average estimate of $2.66 billion, representing a significant year-over-year decrease of 29.7% [4] - Defense Systems sales reached $1.81 billion, slightly below the average estimate of $1.88 billion, but showing a year-over-year increase of 27.8% [4] - Intersegment eliminations reported sales of -$526 million, slightly worse than the average estimate of -$517.83 million, marking a year-over-year decline of 6.4% [4] Operating Income Analysis - Operating income for Mission Systems was $361 million, compared to the average estimate of $394.99 million [4] - Defense Systems operating income was $179 million, slightly below the average estimate of $181.90 million [4] - Aeronautics Systems reported an operating loss of -$183 million, significantly worse than the average estimate of $301.39 million [4] - Space Systems operating income was $283 million, close to the average estimate of $286.83 million [4] - Unallocated corporate expenses were -$58 million, better than the average estimate of -$63.32 million [4]

Financial Data and Key Metrics Changes - First quarter sales were $9.5 billion, down 7% compared to the prior year, impacted by two fewer working days and contracting delays [20][21] - The company updated its 2025 financial guidance, reaffirming its outlook for sales and free cash flow [6][28] - Earnings per share were lower primarily due to the B-21 adjustment, totaling $2.74 per share on an after-tax basis [26] Business Line Data and Key Metrics Changes - Aeronautics sales decreased by 8% year-over-year due to lower B-21 sales and timing of production on mature programs [21] - Defense Systems sales increased by $68 million or 4%, driven by the ramp on the Sentinel program and higher volume on military ammunition [21] - Mission Systems sales grew by $148 million, up 6%, driven by various programs including SABER and international ground-based radar [22] Market Data and Key Metrics Changes - International sales represented approximately 14% of total sales, with international bookings up 11% in the quarter [15][16] - The first quarter international book-to-bill ratio was 1.45 times, indicating strong demand [16] - The company received over $1 billion in international awards, contributing to growth potential in the Defense Systems business [17] Company Strategy and Development Direction - The company aims to compete and win in global markets through technology differentiation and innovation [17] - Significant investments of $13.5 billion in R&D and infrastructure over the last five years have enhanced the company's ability to scale and produce [17] - The strategy includes expanding market presence and optimizing performance to deliver profitable, sustainable growth [19] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand signals from global customers, resulting in a record backlog of $92.8 billion [5] - The U.S. defense budget environment is evolving, with expectations of increased defense spending driven by ongoing developments [13][14] - Management expressed confidence in achieving the full-year sales guidance despite current challenges [28] Other Important Information - The company recognized a pretax loss of $477 million related to the B-21 program due to higher manufacturing costs and material price increases [7][8] - The U.S. Army awarded a nearly $500 million contract for IBCS, expanding software development capabilities [10] - The company opened a new production facility in Alabama to support accelerated modernization plans for air and missile defense systems [10] Q&A Session Summary Question: What milestones should be watched for the B-21 program? - Management discussed the completion of the EMD phase and ongoing tests to meet performance objectives, indicating a focus on risk reduction as production scales [35] Question: How does Northrop Grumman's AI capabilities compare to commercial players? - Management highlighted decades of investment in AI, emphasizing the integration of AI in various applications to enhance user capabilities [38] Question: What is the outlook for U.S. defense spending? - Management noted uncertainty but expressed optimism about award decisions moving forward and alignment with national security priorities [45] Question: What is the anticipated cash impact from the B-21 EAC adjustment? - The cash impact will be spread primarily through 2026, 2027, and 2028, with no material impact expected in 2025 [47] Question: How confident is the company about the profitability of the Sentinel program? - Management expressed confidence in the design and restructuring efforts to reduce costs and improve profitability [53] Question: What is the impact of tariffs on the company's portfolio? - Management indicated that tariffs have a minimal impact, as only about 5% of total spend is sourced from outside the U.S. [56] Question: What is the outlook for international sales growth? - Management expects continued growth in international sales, driven by a significant pipeline of demand and recent bookings [106]

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 ...

美国军工企业诺斯罗普·格鲁曼下调盈利预期 金十数据4月22日讯，美国军工企业诺斯罗普·格鲁曼公司公布第一季度利润低于分析师预期，并下调了 今年的盈利预期，原因是下一代B-21隐形轰炸机的成本上升。诺斯罗普公司表示，第一季度每股利润下 降了47%，主要原因是与B-21相关的新损失拨备。周二，该公司股价盘前下跌近10%。 ...

Here are some other stocks moving lower in pre-market trading. Now Read This: Shares of Northrop Grumman Corporation NOC shares fell sharply in today's pre-market trading after the company reported worse-than-expected first-quarter EPS and revenues. The company also lowered its FY25 EPS guidance. Northrop Grumman reported quarterly earnings of $6.06 per share which missed the analyst consensus estimate of $6.26 per share. The company reported quarterly sales of $9.468 billion which missed the analyst consen ...