Will Poor Space Segment Performance Hit Northrop's Q2 Results?

Core Viewpoint - Northrop Grumman Corporation (NOC) is expected to report its second-quarter 2025 results on July 22, with a projected earnings per share (EPS) of $6.70, reflecting a 5.4% increase year-over-year, despite challenges in the Space Systems segment [1][9]. Revenue Performance by Segment - Aeronautics Systems: Anticipated revenue of $3,151.1 million, representing a 6.3% increase from the previous year, driven by higher production of F-35 jets and Global Hawk sustainment activities [2][1]. - Defense Systems: Expected revenue of $1,860.2 million, indicating a significant 22.9% growth year-over-year, supported by increased sales from the Sentinel program and military ammunition programs [3][1]. - Mission Systems: Projected revenue of $2,904.7 million, showing a 4.7% increase from the prior year, aided by higher sales from various radar and electronic warfare programs [4][1]. - Space Systems: Forecasted revenue of $2,704.8 million, reflecting a decline of 24.3% year-over-year, primarily due to the wind-down of restricted space programs and fewer resupply missions [5][1]. Overall Financial Outlook - The total sales estimate for NOC is $10.11 billion, which represents a slight decrease of 1.1% from the previous year, largely influenced by the downturn in the Space Systems segment [8][1]. - The backlog for NOC is projected to increase by 15% year-over-year to $95.61 billion, indicating strong future demand [6][1]. Earnings Prediction - The earnings performance is expected to benefit from higher operating income in the Defense Systems segment, although losses related to the B-21 program and lower income in Space Systems may negatively impact overall results [9][1]. - The Zacks model indicates that NOC does not conclusively predict an earnings beat this quarter, with an Earnings ESP of +3.10% and a Zacks Rank of 4 (Sell) [10][1].