Core Viewpoint - Northrop Grumman delivered stronger-than-expected fourth-quarter results, but a softer outlook for 2026 negatively impacted shares, which fell over 2% in pre-market trading [1] Financial Performance - The company reported earnings of $7.23 per share, exceeding the consensus estimate of $6.99, while revenue reached $11.7 billion, slightly ahead of expectations [2] - Aeronautics Systems led growth with sales climbing 18% year over year to $3.92 billion, Mission Systems revenue rose 9.7% to $3.45 billion, Space Systems sales increased 5.5% to $2.86 billion, and Defense Systems revenue advanced 7.2% to $2.15 billion [2] - Free cash flow surged 84% year over year to $3.24 billion, modestly above forecasts, while capital expenditures declined to $662 million [3] - Backlog stood at $95.68 billion at the end of the quarter [3] Future Outlook - For fiscal 2026, Northrop Grumman projected earnings of $27.40 to $27.90 per share, below the consensus estimate of $28.85 [4] - Revenue was forecast at $43.5 billion to $44.0 billion, also trailing expectations [4] - Free cash flow was guided to $3.10 billion to $3.50 billion, with capital spending expected to total about $1.65 billion [4]

Core Insights - Northrop Grumman (NOC) is expected to report quarterly earnings of $7.00 per share, reflecting a 9.6% increase year over year, with revenues projected at $11.62 billion, an 8.7% increase compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has been adjusted upward by 0.1% over the past 30 days, indicating a reassessment by analysts [1][2] - Changes in earnings estimates are crucial for predicting investor reactions and have shown a strong correlation with short-term stock performance [2] Key Metrics Forecast - Analysts predict 'Sales- Mission Systems' to reach $3.43 billion, a 9.2% increase from the prior year [4] - 'Sales- Aeronautics Systems' is expected to be $3.79 billion, indicating a 17.7% increase year over year [4] - 'Sales- Space Systems' is forecasted to reach $3.04 billion, reflecting a 12.2% increase [4] Operating Income Projections - 'Sales- Defense Systems' is expected to be $1.91 billion, showing an 18.1% decrease from the previous year [5] - 'Operating income (loss)- Defense Systems' is projected at $191.92 million, down from $252.00 million year over year [5] - 'Operating income (loss)- Mission Systems' is expected to reach $512.35 million, up from $469.00 million [5] - 'Operating income (loss)- Space Systems' is forecasted at $304.56 million, compared to $275.00 million last year [6] - 'Operating income (loss)- Aeronautics Systems' is expected to be $371.41 million, up from $292.00 million [6] Segment Operating Income Adjustment - The estimate for 'Segment operating income adjustment- FAS/CAS operating adjustment' is projected at $53.67 million, significantly higher than the year-ago figure of $8.00 million [7] Stock Performance - Northrop Grumman shares have increased by 14.1% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.7% increase [7]

Summary of Leidos Conference Call Company Overview - **Company**: Leidos - **Industry**: Government contracting, defense, and technology services Key Points Government Contracting Environment - The current government contracting environment has been challenging, influenced by the longest government shutdown in history and changes in administration priorities [2][3][4] - Despite these challenges, Leidos has shown resilience and has been able to increase guidance multiple times throughout the year, indicating strong earnings and margins [2][3] Funding Dynamics - There has been a strategic reprioritization in federal civilian agencies, impacting funding dynamics, but Leidos remains well-positioned with critical mission priorities [5][6] - The company expects funding dynamics to stabilize as they align with administration growth factors, particularly in defense and border security [5][6] Revenue Growth and Performance - In Q3, Leidos experienced accelerated organic revenue growth and a strong book-to-bill ratio, indicating new wins and programs that will contribute to future growth [7][8] - The company anticipates continued momentum into 2026 and beyond, despite some delays caused by the government shutdown [8][9] Key Growth Areas - **Defense Systems**: A multi-billion dollar segment that is expected to grow significantly due to strong demand signals across various product portfolios [12] - **Cybersecurity**: The cyber growth pillar is anticipated to grow rapidly, driven by evolving threats and advancements in AI [13] - **Energy Infrastructure**: This segment has been growing at a double-digit rate and is expected to become a more significant part of the portfolio due to robust demand signals [14] Health Segment - The health business has been a leading performer in terms of growth and margins, with expectations for modest growth in the near term [15][16] - There are opportunities to extend capabilities into rural and behavioral health, supported by recent funding initiatives [15][16] Competition and Recompete Landscape - Leidos is aware of the ongoing recompete landscape, particularly in the health segment, with contracts up for rebid in 2026 [17][19] - The company is focused on maintaining a competitive edge through performance-based contracts and leveraging technology to enhance service delivery [18][20] Golden Dome Initiative - Leidos is actively participating in the Golden Dome initiative, which is expected to move forward with significant resources allocated by the administration [22][24] - The company is bidding on major contracts related to this initiative and believes it has a critical role to play in various aspects of the program [24][27] FAA Modernization - Leidos has opted not to bid for the prime contractor role in the FAA modernization process but remains a key partner and expects to participate in the Common Automation Platform development [31][34] Margin Expansion - Leidos has achieved industry-leading margins, currently in the high 13% range, with a focus on sustaining these margins while exploring further improvements in specific segments [38][39] - The company is implementing internal efficiencies and leveraging AI to drive margin improvements across its portfolio [42][43] AI Integration - Leidos is committed to integrating AI into its operations to enhance efficiency and service delivery, while also partnering with customers to apply AI to mission outcomes [43][44] Additional Insights - The company is optimistic about its long-term trajectory, particularly in defense and cybersecurity, and is focused on maintaining a competitive edge through innovation and strategic positioning [12][13][14][15][16]

Core Insights - Northrop Grumman reported revenue of $10.35 billion for the quarter ended June 2025, reflecting a 1.3% increase year-over-year and surpassing the Zacks Consensus Estimate of $10.06 billion by 2.94% [1] - The company's EPS was $7.11, up from $6.36 in the same quarter last year, exceeding the consensus estimate of $6.71 by 5.96% [1] Financial Performance - Mission Systems sales reached $3.16 billion, exceeding the average estimate of $2.9 billion by analysts, marking a year-over-year increase of 13.9% [4] - Aeronautics Systems sales were $3.11 billion, slightly below the estimated $3.15 billion, with a year-over-year growth of 5.1% [4] - Intersegment eliminations reported sales of -$557 million, worse than the average estimate of -$504.63 million, representing a decline of 7.8% year-over-year [4] - Space Systems sales totaled $2.65 billion, falling short of the $2.7 billion estimate, with a significant year-over-year decrease of 25.9% [4] - Defense Systems sales were $1.99 billion, surpassing the $1.86 billion estimate, showing a robust year-over-year increase of 31.6% [4] Operating Income - Defense Systems operating income was $253 million, exceeding the average estimate of $183.7 million [4] - Mission Systems operating income reached $441 million, above the average estimate of $421.42 million [4] - Space Systems operating income was $280 million, slightly below the average estimate of $283.42 million [4] - Aeronautics Systems operating income was $321 million, surpassing the estimated $299.85 million [4] - Unallocated corporate expenses adjustment showed an operating income of $143 million, significantly higher than the average estimate of -$45.17 million [4] - FAS/CAS operating adjustment reported $63 million, close to the average estimate of $65.27 million [4] Stock Performance - Northrop Grumman shares returned +3.1% over the past month, underperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Viewpoint - Northrop Grumman (NOC) is expected to report quarterly earnings of $6.75 per share, reflecting a year-over-year increase of 6.1%, while revenues are anticipated to be $10.11 billion, showing a decrease of 1.1% compared to the previous year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised downward by 0.3%, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock price performance [3]. Key Metrics Projections - Analysts project 'Sales- Mission Systems' to reach $2.90 billion, a change of +4.8% year-over-year [5]. - 'Sales- Aeronautics Systems' is expected to be $3.15 billion, indicating a +6.4% change from the prior year [5]. - 'Sales- Space Systems' is forecasted to be $2.70 billion, reflecting a significant decrease of -24.3% year-over-year [5]. - 'Sales- Defense Systems' is anticipated to reach $1.86 billion, showing a +23% increase from the previous year [6]. Operating Income Projections - 'Operating income (loss)- Defense Systems' is expected to be $183.70 million, down from $204.00 million reported in the same quarter last year [6]. - 'Operating income (loss)- Mission Systems' is projected at $421.42 million, up from $361.00 million in the prior year [7]. - 'Operating income (loss)- Space Systems' is estimated to be $283.42 million, down from $324.00 million year-over-year [7]. - 'Operating income (loss)- Aeronautics Systems' is expected to reach $301.27 million, slightly up from $295.00 million in the same quarter last year [8]. - The consensus for 'Segment operating income adjustment- FAS/CAS operating adjustment' is $65.27 million, compared to $6.00 million in the previous year [8]. Stock Performance - Northrop Grumman shares have returned +5.1% over the past month, outperforming the Zacks S&P 500 composite's +4.2% change [8].