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    Northrop Grumman Corp (NOC)

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    Business Description

    Northrop Grumman Corporation is a leading global aerospace and defense technology company that provides a broad range of products, services, and solutions primarily to the U.S. Department of Defense and intelligence community, as well as international customers. The company operates through four main sectors: Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems . Northrop Grumman specializes in military aircraft systems, advanced tactical weapons, electronic communications, and end-to-end mission solutions, including satellites and missile defense systems .

    1. Aeronautics Systems - Focuses on military aircraft systems, including strategic long-range strike aircraft, tactical fighter aircraft, and unmanned autonomous aircraft systems.
    2. Space Systems - Delivers end-to-end mission solutions, including satellites, missile defense systems, and launch vehicles, with a significant portion of business performed through restricted programs.
    3. Mission Systems - Provides advanced technologies such as electronic communications, sensors, and secure communications.
    4. Defense Systems - Specializes in advanced tactical weapons, missile defense solutions, and sustainment services for military and international customers.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Kathy J. WardenChair, CEO, and PresidentJanuary 2019Kathy J. Warden has been serving as the Chair, CEO, and President of Northrop Grumman since January 2019. She joined the Board of Directors in July 2018 and has held various leadership roles within the company since 2008 .
    Mark A. CaylorCorporate VP and President, Mission Systems Sector2018Mark A. Caylor has served as Corporate VP and President of the Mission Systems Sector since 2018. He is set to retire on July 26, 2024 .
    Robert J. FlemingCorporate VP and President, Space Systems Sector2023Robert J. Fleming began serving as Corporate VP and President of the Space Systems Sector in 2023. He previously held roles in the Strategic Space Systems Division and Business Development and Strategy .
    Michael A. HardestyCorporate VP, Controller, and Chief Accounting Officer2013Michael A. Hardesty has been the Corporate VP, Controller, and Chief Accounting Officer since 2013 .
    Thomas H. JonesCorporate VP and President, Aeronautics Systems SectorJanuary 1, 2021Thomas H. Jones has been the Corporate VP and President of the Aeronautics Systems Sector since January 1, 2021. He previously served as VP and General Manager of the Airborne C4ISR Division .
    David F. KefferCorporate VP and Chief Financial Officer2020David F. Keffer has been serving as the Corporate VP and CFO since 2020. He will retire on February 21, 2025 .
    Roshan S. RoederCorporate VP and President, Defense Systems SectorOctober 17, 2022Roshan S. Roeder has been the Corporate VP and President of the Defense Systems Sector since October 17, 2022. She previously held roles in the Mission Systems Sector .
    Kathryn G. SimpsonCorporate VP and General Counsel2023Kathryn G. Simpson has been the Corporate VP and General Counsel since 2023. She previously served as VP and Associate General Counsel for the Mission Systems Sector .
    Kenneth B. CrewsCorporate VP and Chief Financial OfficerOctober 1, 2024Kenneth B. Crews was elected as Corporate VP and CFO, effective October 1, 2024. He was appointed as VP, Corporate Finance, effective July 1, 2024 .
    Ben DaviesCorporate VP and President, Defense Systems SectorJuly 1, 2024Ben Davies was elected as Corporate VP and President of the Defense Systems Sector, effective July 1, 2024. He previously served as Corporate VP and General Manager of the Strategic Deterrent Systems division .

    Questions to Ask Management

    1. With ongoing supply chain challenges in areas like microelectronics and solid rocket motors, how confident are you in meeting your growth targets, and have you considered vertical integration to mitigate these risks?
    2. Given the significant investments in solid rocket motor capacity amidst a surge in demand for missiles and munitions, how are you assessing the risk of overcapacity if demand levels decline in the future?
    3. As you plan to reduce capital expenditures in 2025 after a period of elevated investment, how will this impact your ability to pursue growth opportunities and maintain competitiveness in the market?
    4. Regarding the B-21 program's progression and previous charges taken, what steps are you taking to manage cost risks and supplier challenges to ensure margin improvement in the Aeronautics Systems segment?
    5. Considering the recent headwinds in your Space segment and the expectations for multiyear growth, what specific strategies are you implementing to overcome these challenges and achieve your targeted growth rates over the long term?

    Share Repurchase Program

    Program DetailsProgram 1Program 2
    Approval DateJanuary 24, 2022 December 6, 2023
    End Date/DurationFebruary 2024 Ongoing as of September 30, 2024
    Total Additional Amount$2.0 billion $2.5 billion
    Remaining Authorization$0 $1.6 billion
    DetailsCompleted Commences after 2022 program completion

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate% of Total Debt
    2025$1,582 2.93% Senior Notes2.93% 9.7% = (1,582 / 16,378) * 100
    2026$534 7.75% - 7.88% Notes7.75% - 7.88% 3.3% = (534 / 16,378) * 100
    2027$755 3.20% Senior Notes3.20% 4.6% = (755 / 16,378) * 100
    2028$2,044 3.25% Senior Notes3.25% 12.5% = (2,044 / 16,378) * 100
    2029$592 4.60% Senior Notes4.60% 3.6% = (592 / 16,378) * 100
    2030$750 4.40% Senior Notes4.40% 4.6% = (750 / 16,378) * 100
    2031$466 7.75% Senior Notes7.75% 2.8% = (466 / 16,378) * 100
    2033$1,000 4.70% Senior Notes4.70% 6.1% = (1,000 / 16,378) * 100
    2034$850 4.90% Senior Notes4.90% 5.2% = (850 / 16,378) * 100
    2040$800 5.05% - 5.15% Notes5.05% - 5.15% 4.9% = (800 / 16,378) * 100
    2043$950 4.75% Senior Notes4.75% 5.8% = (950 / 16,378) * 100
    2045$600 3.85% Senior Notes3.85% 3.7% = (600 / 16,378) * 100
    2047$2,250 4.03% Senior Notes4.03% 13.7% = (2,250 / 16,378) * 100
    2050$1,000 5.25% Senior Notes5.25% 6.1% = (1,000 / 16,378) * 100
    2053$1,000 4.95% Senior Notes4.95% 6.1% = (1,000 / 16,378) * 100
    2054$1,150 5.20% Senior Notes5.20% 7.0% = (1,150 / 16,378) * 100

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • The Boeing Company
    • General Dynamics
    • L3Harris Technologies
    • Lockheed Martin
    • RTX

    Auditor

    NameStart DateEnd DateReason for Change
    Deloitte & Touche LLP1975 PresentCurrent auditor

    Latest news

    Recent developments and announcements about NOC.

    Financial Reporting

      Earnings Call

      ·
      6 days ago

      The recent earnings call transcript for Northrop Grumman (NOC) provides several key insights into the company's financial performance and strategic outlook. Here are the highlights:

      1. Revenue and Profit Performance: Northrop Grumman reported strong financial results for 2024, with sales reaching $41 billion, marking a 4.4% increase from the previous year. The company achieved a segment operating income of over $4.5 billion, with an operating margin rate of 11.1%. Free cash flow for the year was $2.6 billion, a 25% increase compared to 2023.

      2. Management’s Forward Guidance: For 2025, Northrop Grumman expects continued organic growth of 3% to 4% and further segment margin expansion. The company also anticipates double-digit free cash flow growth. The guidance reflects expectations for strong demand in both domestic and international markets, with a particular focus on areas such as crewed and uncrewed aircraft, advanced weapons, and missile defense.

      3. Market Conditions and Strategic Initiatives: Northrop Grumman is experiencing robust demand for its capabilities, driven by global defense budget increases and the need for advanced defense systems. The company is well-positioned to support U.S. and allied national security needs, with a record backlog of $91.5 billion. Strategic initiatives include investments in advanced technologies and a focus on operational excellence to drive efficiencies and margin expansion.

      4. Analyst Questions and Management Responses: Analysts inquired about various topics, including the impact of potential changes in the Ukraine-Russia conflict on Northrop's revenue, which is expected to be minimal due to the small percentage of revenue from tactical weapons used in Ukraine. Questions also covered the company's international growth prospects, with management highlighting a strong pipeline and expected double-digit growth in international sales.

      5. Significant Contracts and Programs: Northrop Grumman secured a $3.5 billion contract for the TACAMO program, which will contribute significantly to revenue growth. The company expects $350 million in revenue from this contract in the first year. Additionally, the B-21 and GBSD programs are expected to contribute to growth in 2025, albeit at a more modest rate compared to previous years.

      Overall, Northrop Grumman's earnings call highlights a positive financial outlook, driven by strategic investments and strong demand for its defense capabilities.

      Earnings Report

      ·
      6 days ago

      Northrop Grumman Corporation (NOC) Earnings Results Summary

      Northrop Grumman Corporation released its fourth quarter and full-year 2024 financial results on January 30, 2025. Below are the key highlights:

      2024 Financial Performance

      • Sales: Increased by 4.4% to $41.0 billion, compared to $39.3 billion in 2023.
      • Operating Margin Rate: Improved to 10.6% from 6.5% in 2023, driven by higher operating income across segments.
      • Net Earnings: Increased by 103% to $4.2 billion, or $28.34 per diluted share, compared to $2.1 billion in 2023.
      • Free Cash Flow: Grew by 25% to $2.6 billion, reflecting improved trade working capital and higher net earnings.

      Segment Highlights

      1. Aeronautics Systems:

        • Sales: Increased by 12% to $12.0 billion, driven by higher production on the B-21 and F-35 programs.
        • Operating Margin Rate: Improved to 9.8%, reflecting the absence of the prior year B-21 charge.

      2. Defense Systems:

        • Sales: Increased by 3% to $8.6 billion, supported by growth in the Sentinel and military ammunition programs.
        • Operating Margin Rate: Stable at 10.1%.

      3. Mission Systems:

        • Sales: Increased by 5% to $11.4 billion, driven by advanced microelectronics and technology programs.
        • Operating Margin Rate: Declined to 14.0% due to production inefficiencies and changes in contract mix.

      4. Space Systems:

        • Sales: Decreased by 1% to $11.7 billion, impacted by the wind-down of restricted space and NGI programs.
        • Operating Margin Rate: Improved to 10.7% from 9.5% in 2023.

      2025 Guidance

      • Sales: Projected between $42.0 billion and $42.5 billion.
      • Segment Operating Income: Expected between $4.65 billion and $4.8 billion.
      • MTM-Adjusted EPS: Estimated at $27.85 to $28.25.
      • Free Cash Flow: Anticipated between $2.85 billion and $3.25 billion.

      Backlog and Awards

      • Backlog: Reached a record $91.5 billion, reflecting strong demand for restricted programs, F-35, and Next-Gen OPIR Polar.
      • Significant Awards: Included $4.0 billion for restricted programs, $3.5 billion for TACAMO, and $1.9 billion for F-35.

      Key Trends and Outlook

      • Northrop Grumman anticipates continued organic sales growth, margin expansion, and double-digit free cash flow growth in 2025.
      • The company remains focused on innovation and meeting national security needs, as highlighted by CEO Kathy Warden.

      For further details, visit the company’s investor relations page or access the full earnings release.