Northrop Grumman Stock Tumbles On Q1 Earnings: Revenue Miss, EPS Miss, Lowered Guidance

Northrop Grumman Corp NOC shares are moving lower Tuesday after the company reported first-quarter financial results that came up short of analyst estimates and lowered its full-year earnings guidance.

Q1 Earnings: Northrop Grumman reported first-quarter revenue of $9.47 billion, missing analyst estimates of $9.94 billion, according to Benzinga Pro. The aerospace and defense company reported first-quarter adjusted earnings of $6.06 per share, missing analyst estimates of $6.26 per share.

Total sales were down 7% in the first quarter due to lower Space Systems sales and lower Aeronautics systems sales.

Aeronautics sales decreased 8% year-over-year primarily due to lower sales on B-21 and other restricted programs, as well as a decrease in F-35 sustainment volume. Defense Systems sales increased 4% year-over-year, primarily due to continued ramp of the Sentinel program and higher volume on certain military ammunition programs.

Mission Systems revenue increased 6% year-over-year, while Space Systems revenue fell 18% on a year-over-year basis.

Net awards for the first quarter totaled $10.8 billion. The company said it had a new record backlog of $92.8 billion at the end of the quarter.

"Global demand for our products remains strong, which is reflected in our record first quarter backlog, and we are making significant progress on our key programs," said Kathy Warden, chair, president and CEO of Northrop Grumman.

"The Northrop Grumman team remains committed to driving innovation to meet our customers' priorities, expanding our market presence and optimizing performance to deliver profitable, sustainable growth. Given this, we are reaffirming our sales and free cash flow guidance for the year."

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Guidance: Northrop Grumman expects full-year 2025 revenue of $42 billion to $42.5 billion versus estimates of $42.32 billion. The company anticipates full-year free cash flow of $2.85 billion to $3.25 billion.

Despite reaffirming its outlook for revenue and free cash flow, shares appear to be reacting negatively to the company’s lowered earnings outlook.

Northrop Grumman cut its full-year 2025 earnings outlook from a range of $27.85 to $28.25 to a new range of $24.95 to $25.35. Analysts had been forecasting full-year earnings of $28.09, according to Benzinga Pro.

“The company's financial guidance and outlook for 2025 and beyond reflect what the company currently anticipates will be the impacts on the company from, among other factors, the global macroeconomic, security, and political/budget environments, including the impacts from inflationary pressures and labor and supply chain challenges; changes in the threat environment; changes in government budget, appropriations and procurement priorities and processes; the continuing resolution; changes in the regulatory environment, including trade policy; and changes in support for our programs,” the company said.

NOC Price Action: Northrop Grumman shares were down 8.91% at $484.00 at the time of publication Tuesday morning, according to Benzinga Pro.

Photo: Ian Dewar Photography/Shutterstock.