Northrop Grumman(NOC) - 2025 Q1 - Quarterly Results

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]