Northrop Grumman(US:NOC)2026-01-27 11:44Sales Performance - Fourth quarter 2025 sales increased 10% to $11.7 billion, compared to $10.7 billion in Q4 2024[2] - Full-year 2025 sales rose 2% to $42.0 billion, up from $41.0 billion in 2024, with organic sales increasing 3% to $41.8 billion[2][3] - Fourth quarter 2025 sales increased by $591 million, or 18 percent, primarily due to a $274 million increase on the F-35 program and a $153 million increase on the E-130J TACAMO program [22] - Total sales for 2025 reached $41,954 million, an increase from $41,033 million in 2024 and $39,290 million in 2023[57] Earnings and Profitability - Fourth quarter 2025 net earnings were $1.4 billion, or $9.99 per diluted share, while full-year net earnings were $4.2 billion, or $29.08 per diluted share[2][3] - 2025 net earnings were comparable to the prior year, reflecting a $141 million increase in operating income, partially offset by a $115 million decrease in non-operating FAS pension benefit [16] - Net earnings for 2025 were $4,182 million, compared to $4,174 million in 2024 and $2,056 million in 2023[57] - Basic earnings per share for 2025 were $29.14, up from $28.39 in 2024 and $13.57 in 2023[57] Operating Income and Margins - Operating income for Q4 2025 increased 17% to $1.3 billion, with an operating margin rate of 10.9%[3] - Segment operating income for Q4 2025 increased 10%, with a segment operating margin rate of 11.2%[3][9] - Fourth quarter 2025 operating margin rate for Aeronautics Systems was 9.4 percent, comparable to the prior year, while the overall segment operating margin rate was 11.2 percent [1] - Fourth quarter 2025 operating income for Mission Systems increased by $41 million, or 9 percent, with an operating margin rate of 14.8 percent [36] - Fourth quarter 2025 operating income for Space Systems increased by $47 million, or 17 percent, with an operating margin rate of 11.3 percent [41] Cash Flow and Capital Expenditures - Operating cash flow for 2025 was $4.8 billion, with free cash flow of $3.3 billion[3] - Fourth quarter 2025 free cash flow increased by $1.5 billion, or 84 percent, driven by higher net cash from operating activities and lower capital expenditures [17] - Capital expenditures for 2025 were $1,450 million, down from $1,767 million in 2024[63] - Free cash flow for 2025 was calculated as net cash provided by operating activities minus capital expenditures, indicating strong cash performance[77] Backlog and Future Projections - The backlog reached a record $95.7 billion, driven by a full-year book-to-bill ratio of 1.10[3] - Total backlog as of the end of 2025 was $95.7 billion, with significant new awards including $4.0 billion for restricted programs and $1.3 billion for F-35 [18] - The company projects mid-single digit sales growth for 2026, supported by a strong backlog[3] - The company projects 2026 sales between $43,500 million and $44,000 million, with segment operating income expected to be between $4,850 million and $5,000 million[46] Tax and Shares - The effective income tax rate for 2025 was 17.5%, compared to 16.8% in 2024[6] - The weighted-average diluted shares outstanding decreased to 142.9 million in 2025 from 145.9 million in 2024[71] Assets and Debt - Total assets increased to $51,377 million in 2025 from $49,359 million in 2024[60] - Net proceeds from the issuance of long-term debt in 2025 were $998 million, a decrease from $2,495 million in 2024[63] - Cash and cash equivalents at the end of 2025 were $4,403 million, up from $4,353 million at the end of 2024[63]