Northrop Grumman Reaffirms 2024 Guidance Post Double-Digit Earnings Growth In Q1: Details

Northrop Grumman Corp NOC reported first-quarter fiscal 2024 sales growth of 9% year-over-year to $10.133 billion, beating the consensus of $9.771 billion.

First-quarter EPS was $6.32 compared to $5.50 a year ago, beating the consensus of $5.74.

“Robust global defense spending and our strong backlog, along with expanding margins, continue to support our multi-year outlook for free cash flow growth,” commented Kathy Warden, chair, chief executive officer, and president.

Sales by segments: Aeronautics Systems $2.97 billion (+18% Y/Y), Defense Systems $1.41 billion (+3% Y/Y), Mission Systems $2.66 billion (+4% Y/Y), and Space Systems $3.65 billion (+9% Y/Y).

Segment operating income rose 10% Y/Y to $1.1 billion, and margin expanded by 10 bps to 10.9%. Total operating margin expanded by 40 bps to 10.6%.

NOC’s first-quarter net awards totaled $6.5 billion, and its backlog totaled $78.9 billion. Significant first quarter new awards include $3.1 billion for restricted programs.

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The company’s operating cash used in operating activities for the quarter totaled $(706) million (-1% Y/Y), and free cash outflow stood at $(976) million (+3% Y/Y).

Northrop Grumman returned $1.5 billion to investors via dividends and share repurchases and expects greater than $2 billion in 2024 share repurchases.  

Fiscal 2024 Outlook, reaffirmed: Northrop Grumman sees sales of $40.8 billion – $41.2 billion versus the consensus of $41.11 billion; The company sees MTM-adjusted EPS of $24.45-$24.85 (consensus $24.65).

It sees Segment operating income of $4.475 billion-$4.55 billion and an adjusted free cash flow of $2.25 billion-$2.65 billion for 2024.

Price Action: NOC shares traded higher by 1.56% at $481.98 at the last check Thursday.

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