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Sep 30, 2021
Northrop Grumman Q3 2021 Earnings Report
Northrop Grumman's financial performance was solid, with strong program execution and operational excellence, despite labor and supply chain challenges.
Key Takeaways
Northrop Grumman reported a decrease in sales by 4% to $8.7 billion, but organic sales increased by 3%. Net earnings increased by 8% to $1.1 billion, or $6.63 per diluted share. The company raised its full year earnings guidance and continues to expect strong organic sales growth.
Sales decreased 4 percent to $8.7 billion; organic sales increased 3 percent.
EPS increased 13 percent to $6.63.
Segment operating margin rate was strong at 11.9 percent.
2021 transaction-adjusted EPS guidance increased by $0.80 to a range of $25.20 to $25.60.
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 updated its 2021 financial guidance to reflect year-to-date operating performance and the divestiture of its IT services business.
Positive Outlook
- Sales are expected to be approximately $36 billion.
- Segment operating margin is expected to be between 11.7% and 11.9%.
- Total net FAS/CAS pension adjustment is expected to be approximately $1.6 billion.
- Transaction-adjusted EPS is projected to be in the range of $25.20 to $25.60.
- Adjusted free cash flow is anticipated to be between $2.2 billion and $2.5 billion.
Challenges Ahead
- The company's ability to achieve guidance or meet expectations can be affected by disruptions to operations, supply chain challenges, effects on the labor market, vaccine mandates and other evolving government requirements.
- Additional liabilities, disruptions in the financial markets and inflation, and impacts on programs or payments relating to the global COVID-19 pandemic, today and as it may evolve, can affect the company’s ability to achieve guidance or meet expectations.
- Government budget, appropriations and procurement priorities and processes can impact customers, programs and financial results.
- 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, extraordinary measures taken in connection with a breach, changes in support for our programs, or changes in federal corporate tax laws and regulations, can impact the company's ability to achieve guidance or meet expectations.
- The guidance reflects the divestiture of its IT services business.
Revenue & Expenses
Visualization of income flow from segment revenue to net income