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Sep 30, 2020
Northrop Grumman Q3 2020 Earnings Report
Northrop Grumman reported strong Q3 2020 results with increased sales, earnings, and cash flow, driven by growth strategy execution and solid program performance.
Key Takeaways
Northrop Grumman reported a 7% increase in sales to $9.1 billion and a 6% increase in net earnings to $1.0 billion for Q3 2020. The company raised its 2020 guidance, expecting sales of $35.7 to $36 billion and free cash flow of $3.3 to $3.6 billion. New awards totaled $20.3 billion, resulting in a record backlog of $81.3 billion.
Net awards totaled $20.3 billion, representing a 2.2 book-to-bill ratio.
Total backlog increased to a record $81.3 billion.
Sales increased by 7 percent to $9.1 billion.
EPS increased by 7 percent to $5.89.
Northrop Grumman
Northrop Grumman
Northrop Grumman Revenue by Segment
Revenue by Segment
Aeronautics Systems Revenue
CapyFin.comDefense Systems Revenue
CapyFin.comMission Systems Revenue
CapyFin.comSpace Systems Revenue
CapyFin.com Forward Guidance
Northrop Grumman raised its 2020 financial guidance based on year-to-date performance and its most current outlook for the remainder of the year.
Positive Outlook
- Sales are expected to be between $35.7 billion and $36 billion.
- Segment operating margin is expected to be between 11.3% and 11.5%.
- Total net FAS/CAS pension adjustment is expected to be approximately $1.625 billion.
- MTM-adjusted EPS is expected to be between $22.25 and $22.65.
- Free cash flow is expected to be between $3.3 billion and $3.6 billion.
Challenges Ahead
- The company's 2020 financial guidance and outlook for 2021 and beyond reflect the impacts experienced to date from the global COVID-19 pandemic.
- Disruptions to the company’s operations (or those of its customers or supply chain), additional costs, disruptions in the market, and impacts on programs or payments relating to the global COVID-19 pandemic, today and as it may evolve, can be expected to affect the company’s ability to achieve guidance or meet expectations.
- The government budget, appropriations and procurement processes can impact our customers, programs and financial results.
- These processes, including the timing of appropriations and the occurrence of an extended continuing resolution and/or prolonged government shutdown, as well as a breach of the debt ceiling, or changes in support for our programs or in federal corporate tax rates, can impact the company's ability to achieve guidance or meet expectations.
- Unallocated corporate expense Intangible asset amortization & PP&E step-up depreciation is expected to be approximately $315 million
Revenue & Expenses
Visualization of income flow from segment revenue to net income