Why Northrop Grumman Stock Is Plummeting Today

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].