Northrop (NOC) Beats on Q2 Earnings, Ups '24 Sales View

Core Insights - Northrop Grumman Corporation (NOC) reported second-quarter 2024 earnings of $6.36 per share, exceeding the Zacks Consensus Estimate of $5.95 by 6.9% and reflecting a 19.1% increase from the previous year's $5.34 [14] - The company's total sales reached $10.22 billion, surpassing the Zacks Consensus Estimate of $10.07 billion by 1.4% and increasing 6.7% from $9.58 billion reported in the year-ago quarter [27] - NOC's total backlog was $83.12 billion at the end of the second quarter of 2024, up from $78.90 billion at the end of the first quarter [15] Financial Performance - The unit's operating income totaled $1.09 billion, a 13% increase from $967 million in the prior-year quarter, driven by strong performance and cost efficiencies [18] - The company's operating margin deteriorated 70 basis points to 10% despite an increase in operating income to $295 million compared to $278 million in the second quarter of 2023 [2] - Net cash flow from operating activities was $719 million during the first six months of 2024, compared to $219 million a year ago [19] Segment Performance - Aeronautics Systems segment sales rose 14.2% year over year to $2.96 billion, attributed to higher restricted sales and increased volumes from the Triton program [6] - Defense Systems sales increased 6.5% year over year to $1.51 billion, driven by military ammunition programs and the Stand-in Attack Weapon (SiAW) program [7] - Mission Systems sales increased 4% to $2.77 billion, supported by higher volume from advanced microelectronics programs and marine systems [16] - Space Systems sales rose 2% to $3.57 billion, driven by growth from the Space Development Agency programs and the HALO program [17] Guidance and Outlook - NOC raised its 2024 revenue guidance to a range of $41.00-$41.40 billion, up from the previous guidance of $40.80-$41.20 billion [20] - The company expects adjusted earnings to be in the range of $24.90-$25.30 per share, compared to the earlier guided range of $24.45-$24.85 [10] - The consensus estimate for sales is pegged at $41.19 billion, just below the mid-point of the company's guided range [20]