Northrop Grumman Beats on Q2 Earnings & Revenues, Raises '25 EPS View

Core Insights - Northrop Grumman Corporation (NOC) reported second-quarter 2025 adjusted earnings of $7.11 per share, exceeding the Zacks Consensus Estimate of $6.71 by 6% [1] - The company’s total sales reached $10.35 billion, surpassing the Zacks Consensus Estimate of $10.06 billion by 2.9% and showing a year-over-year increase of 1.3% from $10.22 billion [3] - NOC's total backlog decreased to $89.74 billion from $92.80 billion at the end of the first quarter of 2025, while the projected backlog was $115.31 billion [4] Financial Performance - The year-over-year improvement in earnings was attributed to strong segment operating performance and a net after-tax benefit from the divestiture of the training services business [2] - Total operating income for the quarter was $1.43 billion, up from $1.09 billion in the prior-year quarter, driven by higher income in Aeronautics Systems, Mission Systems, and Defense Systems [10] - Cash and cash equivalents as of June 30, 2025, totaled $1.90 billion, down from $4.35 billion at the end of 2024, while long-term debt increased to $15.16 billion from $14.69 billion [11] Segment Performance - Aeronautics Systems reported sales of $3.11 billion, a 2% increase year over year, with operating income rising to $321 million [5] - Mission Systems saw a 14% increase in sales to $3.16 billion, with operating income up 22% to $441 million [6] - Defense Systems experienced a 7% sales increase to $1.99 billion, with operating income improving 32% to $253 million [7] - Space Systems sales declined 12% to $2.65 billion, with operating income decreasing 8% to $280 million [8] Guidance Update - NOC updated its 2025 revenue guidance to a range of $42.05-$42.25 billion, compared to the previous range of $42.00-$42.50 billion [12] - The company now expects adjusted earnings in the range of $25.00-$25.40 per share, higher than the earlier guidance of $24.95-$25.35 [13] - Adjusted free cash flow is projected to be between $3.05-$3.35 billion, an increase from the previous range of $2.85-$3.25 billion [13]