1 Non-GAAP measure - see definitions at the end of this earnings release.
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports First Quarter 2024 Financial Results
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Three Months Ended March 31 | |||||
$ in millions, except per share amounts | 2024 | 2023 | Change | ||
Sales | |||||
Aeronautics Systems | $ | 2,969 | $ | 2,515 | 18% |
Defense Systems | 1,412 | 1,376 | 3% | ||
Mission Systems | 2,659 | 2,563 | 4% | ||
Space Systems | 3,655 | 3,350 | 9% | ||
Intersegment eliminations | (562) | (503) | |||
Total sales | 10,133 | 9,301 | 9% | ||
Operating income
| |||||
Aeronautics Systems | 297 | 237 | 25% | ||
Defense Systems | 177 | 160 | 11% | ||
Mission Systems | 378 | 360 | 5% | ||
Space Systems | 332 | 313 | 6% | ||
Intersegment eliminations | (80) | (68) | |||
Segment operating income1
| 1,104 | 1,002 | 10% | ||
Segment operating margin rate1
| 10.9 | % | 10.8 | % | 10 bps |
FAS/CAS operating adjustment | 6 | (21) | NM | ||
Unallocated corporate expense:
| |||||
Intangible asset amortization and PP&E step-up depreciation | (25) | (30) | (17%) | ||
Other unallocated corporate expense
| (14) | (4) | 250% | ||
Unallocated corporate expense
| (39) | (34) | 15% | ||
Total operating income
| $ | 1,071 | $ | 947 | 13% |
Operating margin rate | 10.6 | % | 10.2 | % | 40 bps |
Interest expense | (146) | (129) | 13% | ||
Non-operating FAS pension benefit | 168 | 132 | 27% | ||
Other, net | 38 | 48 | (21%) | ||
Earnings before income taxes
| 1,131 | 998 | 13% | ||
Federal and foreign income tax (benefit) expense
| 187 | 156 | 20% | ||
Effective income tax rate | 16.5 | % | 15.6 | % | 90 bps |
Net earnings
| $ | 944 | $ | 842 | 12% |
Diluted earnings per share
| 6.32 | 5.50 | 15% | ||
Weighted-average diluted shares outstanding, in millions | 149.3 | 153.2 | (3%) | ||
Net cash used in operating activities | $ | (706) | $ | (702) | (1%) |
Capital expenditures | (270) | (309) | (13%) | ||
Free cash flow1
| $ | (976) | $ | (1,011) | 3% |
1 Non-GAAP measure - see definitions at the end of this earnings release.
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports First Quarter 2024 Financial Results
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1 Non-GAAP measure - see definitions at the end of this earnings release.
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
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Northrop Grumman Reports First Quarter 2024 Financial Results
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AERONAUTICS SYSTEMS
| Three Months Ended March 31 |
%
| ||||
$ in millions | 2024 | 2023 | Change | |||
Sales | $ | 2,969 | $ | 2,515 | 18 | % |
Operating income
| 297 | 237 | 25 | % | ||
Operating margin rate | 10.0 | % | 9.4 | % |
DEFENSE SYSTEMS
| Three Months Ended March 31 |
%
| ||||
$ in millions | 2024 | 2023 | Change | |||
Sales | $ | 1,412 | $ | 1,376 | 3 | % |
Operating income | 177 | 160 | 11 | % | ||
Operating margin rate | 12.5 | % | 11.6 | % |
1 Non-GAAP measure - see definitions at the end of this earnings release.
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports First Quarter 2024 Financial Results
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MISSION SYSTEMS
| Three Months Ended March 31 |
%
| ||||
$ in millions | 2024 | 2023 | Change | |||
Sales | $ | 2,659 | $ | 2,563 | 4 | % |
Operating income | 378 | 360 | 5 | % | ||
Operating margin rate | 14.2 | % | 14.0 | % |
SPACE SYSTEMS
| Three Months Ended March 31 |
%
| ||||
$ in millions | 2024 | 2023 | Change | |||
Sales | $ | 3,655 | $ | 3,350 | 9 | % |
Operating income | 332 | 313 | 6 | % | ||
Operating margin rate | 9.1 | % | 9.3 | % |
1 Non-GAAP measure - see definitions at the end of this earnings release.
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
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Northrop Grumman Reports First Quarter 2024 Financial Results
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
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Northrop Grumman Reports First Quarter 2024 Financial Results
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2024 Guidance
| ||
($ in millions, except per share amounts) | As of 1/25/2024 | As of 4/25/2024 |
Sales | $40,800 - $41,200 | $40,800 - $41,200 |
Segment operating income1
| $4,475 - $4,550 | $4,475 - $4,550 |
Total net FAS/CAS pension adjustment2
| ~$700 | ~$700 |
Unallocated corporate expense | ||
Intangible asset amortization & PP&E step-up depreciation | ~$100 | ~$100 |
Other items | ~$190 | ~$190 |
Operating income | $4,215 - $4,290 | $4,215 - $4,290 |
Interest expense | ~$660 | ~$660 |
Effective tax rate % | ~17% | ~17% |
Weighted average diluted shares outstanding | Mid 148 | Mid 148 |
MTM-adjusted EPS1
| $24.45 - $24.85 | $24.45 - $24.85 |
Capital expenditures | ~$1,800 | ~$1,800 |
Free cash flow1
| $2,250 - $2,650 | $2,250 - $2,650 |
2024 Segment Guidance
| ||||
As of 1/25/2024 | As of 4/25/2024 | |||
Sales ($B) | OM Rate % | Sales ($B) | OM Rate % | |
Aeronautics Systems | Low $11 | Mid 9% | Mid $11 | Mid 9% |
Defense Systems | ~$6 | Low 12% | ~$6 | Low to Mid 12% |
Mission Systems | Low to Mid $11 | ~15% | Low to Mid $11 | High 14% |
Space Systems | Mid to High $14 | ~9% | Low to Mid $14 | ~9% |
Eliminations | ~($2.3) | High 13% | ~($2.3) | High 13% |
1 | Non-GAAP measure - see definitions at the end of this earnings release. |
2 |
Total Net FAS/CAS pension adjustment is presented as a single amount and includes $270 million of expected CAS pension expense and $240 million of FAS pension service expense, both of which are reflected in operating income. Non-operating FAS pension benefit of $670 million is reflected below operating income, and the total net FAS/CAS pension adjustment is $700 million.
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
|
Northrop Grumman Reports First Quarter 2024 Financial Results
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
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Northrop Grumman Reports First Quarter 2024 Financial Results
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
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Northrop Grumman Reports First Quarter 2024 Financial Results
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10
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
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Northrop Grumman Reports First Quarter 2024 Financial Results
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Three Months Ended March 31 | ||||
$ in millions, except per share amounts | 2024 | 2023 | ||
Sales | ||||
Product | $ | 8,102 | $ | 7,271 |
Service | 2,031 | 2,030 | ||
Total sales | 10,133 | 9,301 | ||
Operating costs and expenses | ||||
Product | 6,411 | 5,727 | ||
Service | 1,589 | 1,589 | ||
General and administrative expenses | 1,062 | 1,038 | ||
Total operating costs and expenses | 9,062 | 8,354 | ||
Operating income | 1,071 | 947 | ||
Other (expense) income | ||||
Interest expense | (146) | (129) | ||
Non-operating FAS pension benefit | 168 | 132 | ||
Other, net | 38 | 48 | ||
Earnings before income taxes | 1,131 | 998 | ||
Federal and foreign income tax expense | 187 | 156 | ||
Net earnings | $ | 944 | $ | 842 |
Basic earnings per share | $ | 6.34 | $ | 5.52 |
Weighted-average common shares outstanding, in millions | 148.9 | 152.6 | ||
Diluted earnings per share | $ | 6.32 | $ | 5.50 |
Weighted-average diluted shares outstanding, in millions | 149.3 | 153.2 | ||
Net earnings (from above) | $ | 944 | $ | 842 |
Other comprehensive (loss) income, net of tax | ||||
Change in cumulative translation adjustment | 1 | 2 | ||
Change in other, net | (16) | - | ||
Other comprehensive (loss) income, net of tax | (15) | 2 | ||
Comprehensive income | $ | 929 | $ | 844 |
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports First Quarter 2024 Financial Results
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$ in millions, except par value | March 31, 2024 | December 31, 2023 | ||
Assets | ||||
Cash and cash equivalents | $ | 3,061 | $ | 3,109 |
Accounts receivable, net | 1,832 | 1,454 | ||
Unbilled receivables, net | 6,450 | 5,693 | ||
Inventoried costs, net | 1,370 | 1,109 | ||
Prepaid expenses and other current assets | 2,083 | 2,341 | ||
Total current assets | 14,796 | 13,706 | ||
Property, plant and equipment, net of accumulated depreciation of $8,149 for 2024 and $7,964 for 2023
| 9,690 | 9,653 | ||
Operating lease right-of-use assets | 1,763 | 1,818 | ||
Goodwill | 17,515 | 17,517 | ||
Intangible assets, net | 290 | 305 | ||
Deferred tax assets | 1,123 | 1,020 | ||
Other non-current assets | 2,641 | 2,525 | ||
Total assets | $ | 47,818 | $ | 46,544 |
Liabilities | ||||
Trade accounts payable | $ | 2,580 | $ | 2,110 |
Accrued employee compensation | 1,701 | 2,251 | ||
Advance payments and billings in excess of costs incurred | 3,530 | 4,193 | ||
Other current liabilities | 5,321 | 3,388 | ||
Total current liabilities | 13,132 | 11,942 | ||
Long-term debt, net of current portion of $1,582 for 2024 and $70 for 2023
| 14,742 | 13,786 | ||
Pension and other postretirement benefit plan liabilities | 1,250 | 1,290 | ||
Operating lease liabilities | 1,830 | 1,892 | ||
Other non-current liabilities | 2,641 | 2,839 | ||
Total liabilities | 33,595 | 31,749 | ||
Shareholders' equity | ||||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding
| - | - | ||
Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2024-148,088,480 and 2023-150,109,271
| 148 | 150 | ||
Paid-in capital | - | - | ||
Retained earnings | 14,218 | 14,773 | ||
Accumulated other comprehensive loss | (143) | (128) | ||
Total shareholders' equity | 14,223 | 14,795 | ||
Total liabilities and shareholders' equity | $ | 47,818 | $ | 46,544 |
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports First Quarter 2024 Financial Results
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Three Months Ended March 31 | ||||
$ in millions | 2024 | 2023 | ||
Operating activities | ||||
Net earnings | $ | 944 | $ | 842 |
Adjustments to reconcile to net cash used in operating activities: | ||||
Depreciation and amortization | 299 | 298 | ||
Stock-based compensation | 20 | 19 | ||
Deferred income taxes | (103) | (205) | ||
Net periodic pension and OPB income | (113) | (76) | ||
Pension and OPB contributions | (36) | (40) | ||
Changes in assets and liabilities: | ||||
Accounts receivable, net | (378) | (550) | ||
Unbilled receivables, net | (757) | (232) | ||
Inventoried costs, net | (262) | (137) | ||
Prepaid expenses and other assets | 49 | (54) | ||
Accounts payable and other liabilities | (581) | (1,128) | ||
Income taxes payable, net | 219 | 576 | ||
Other, net | (7) | (15) | ||
Net cash used in operating activities | (706) | (702) | ||
Investing activities | ||||
Capital expenditures | (270) | (309) | ||
Other, net | 1 | - | ||
Net cash used in investing activities | (269) | (309) | ||
Financing activities | ||||
Net proceeds from issuance of long-term debt | 2,495 | 1,995 | ||
Common stock repurchases | (1,190) | (723) | ||
Cash dividends paid | (283) | (270) | ||
Payments of employee taxes withheld from share-based awards | (55) | (47) | ||
Other, net | (40) | (26) | ||
Net cash provided by financing activities | 927 | 929 | ||
Decrease in cash and cash equivalents | (48) | (82) | ||
Cash and cash equivalents, beginning of year | 3,109 | 2,577 | ||
Cash and cash equivalents, end of period | $ | 3,061 | $ | 2,495 |
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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|
Northrop Grumman Reports First Quarter 2024 Financial Results
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March 31, 2024 | December 31, 2023 |
% Change in 2024
| ||||||||
$ in millions |
Funded1
| Unfunded |
Total Backlog2 |
Total Backlog2 | ||||||
Aeronautics Systems | $ | 9,212 | $ | 9,750 | $ | 18,962 | $ | 19,583 | (3) | % |
Defense Systems | 6,042 | 1,709 | 7,751 | 8,064 | (4) | % | ||||
Mission Systems | 10,838 | 4,898 | 15,736 | 16,108 | (2) | % | ||||
Space Systems | 9,386 | 27,085 | 36,471 | 40,475 | (10) | % | ||||
Total backlog | $ | 35,478 | $ | 43,442 | $ | 78,920 | $ | 84,230 | (6) | % |
1 | Funded backlog represents firm orders for which funding is authorized and appropriated. |
2 | Total backlog excludes unexercised contract options and indefinite delivery, indefinite quantity (IDIQ) contracts until the time the option or IDIQ task order is exercised or awarded. |
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
news.northropgrumman.com
|
Northrop Grumman Reports First Quarter 2024 Financial Results
|
15
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Three Months Ended March 31 | ||||
$ in millions, except per share amounts | 2024 | 2023 | ||
Per share impact of total net FAS/CAS pension adjustment | ||||
FAS/CAS operating adjustment | $ | 6 | $ | (21) |
Non-operating FAS pension benefit | 168 | 132 | ||
Total net FAS/CAS pension adjustment | 174 | 111 | ||
Tax effect1
| (44) | (28) | ||
After-tax impact | $ | 130 | $ | 83 |
Weighted-average diluted shares outstanding, in millions | 149.3 | 153.2 | ||
Per share impact | $ | 0.87 | $ | 0.54 |
Per share impact of intangible asset amortization and PP&E step-up depreciation | ||||
Intangible asset amortization and PP&E step-up depreciation | $ | (25) | $ | (30) |
Tax effect1
| 6 | 8 | ||
After-tax impact | $ | (19) | $ | (22) |
Weighted-average diluted shares outstanding, in millions | 149.3 | 153.2 | ||
Per share impact | $ | (0.13) | $ | (0.14) |
1 | Based on a 21% federal statutory tax rate and a 5.25% blended state tax rate. |
Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Reports First Quarter 2024 Financial Results
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Northrop Grumman Corporation
2980 Fairview Park Drive • Falls Church, VA 22042-4511
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Northrop Grumman Corporation published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 10:48:18 UTC.