Northrop Grumman Q2 Results Miss Estimates; Reiterates FY22 Outlook

Northrop Grumman Q2 Results Miss Estimates; Reiterates FY22 Outlook
  • Northrop Grumman Corp NOC reported a second-quarter FY22 sales decline of 4% year-over-year to $8.8 billion, missing the consensus of $9.07 billion.
  • EPS was $6.06, down from $6.42 in 2Q21, missing the consensus of $6.10.
  • Sales by segments: Aeronautics Systems $2.53 billion (-13% Y/Y), Defense Systems $1.29 billion (-9% Y/Y), Mission Systems $2.52 billion (-3% Y/Y), and Space Systems $2.98 billion (+8% Y/Y).
  • NOC stated that Q2 sales reflect continued headwinds from the macroeconomic environment, including a tight labor market and extended material lead times, affecting sales timing.
  • Total operating income was $954 million (-9% Y/Y), and the margin contracted by 60 bps to 10.8%, while the segment operating margin was flat at 12.2%.
  • Q2 net awards totaled $13 billion with a book-to-bill ratio of 1.48, and the backlog totaled $80 billion (+6% Y/Y).
  • Northrop Grumman’s net cash used in operating activities year-to-date totaled $(685) million, compared to cash generated $962 million a year ago, with an adjusted free cash outflow of $(1.19) billion.
  • FY22 Outlook reaffirmed: Northrop Grumman expects sales of $36.2 billion-$36.6 billion, against the consensus of $36.54 billion. Transaction adjusted EPS of $24.50 -$25.10 versus the consensus of $24.83.
  • It expects a segment operating margin of 11.7% - 11.9%.
  • Price Action: NOC shares traded higher by 0.47% at $447.90 on the last check Thursday.

Posted In: BriefsEarningsNewsGuidance