10-KPeriod: FY2008

NORTHROP GRUMMAN CORP /DE/ Annual Report, Year Ended Dec 31, 2008

Filed February 10, 2009For Securities:NOC

Summary

Northrop Grumman Corporation (NOC) reported significant financial events and operational performance in its 2008 10-K filing. Despite a reported net loss of $1.26 billion, driven largely by a substantial $3.1 billion non-cash goodwill impairment charge related to market conditions affecting its Shipbuilding and Space Technology segments, the company achieved record sales of $33.9 billion, a 6% increase year-over-year. Cash from operations also reached a record $3.2 billion. The company maintained a strong backlog of $78.1 billion, boosted by record contract awards of $48.3 billion. Key financial actions included significant share repurchases totaling $1.6 billion, and an increase in the quarterly common stock dividend from $0.37 to $0.40 per share. The company also completed the conversion and redemption of its Series B Convertible Preferred Stock, issuing approximately 6.4 million shares of common stock. Looking ahead, Northrop Grumman anticipates sales of approximately $34.5 billion in 2009, though it acknowledges economic uncertainties and potential impacts on future defense spending.

Financial Highlights

50 data points
Beta

Revenue

$32.31B

52.1% Gross Margin

Net Income

-$1.26B

-3.9% Net Margin

EPS (Diluted)

$-3.77

Total Assets

$30.20B

Cash & Equivalents

$1.50B

Free Cash Flow

$2.53B

Financial Statements
Beta
Revenue$32.31B
Cost of Revenue$15.49B
Gross Profit$16.82B
R&D Expenses$564.00M
Operating Income-$263.00M
Net Income-$1.26B
EPS (Basic)$-3.77
EPS (Diluted)$-3.77
Shares Outstanding (Basic)334.50M
Shares Outstanding (Diluted)334.50M

Key Highlights

  • 1Record sales of $33.9 billion, a 6% increase year-over-year.
  • 2Significant $3.1 billion non-cash goodwill impairment charge impacting Shipbuilding and Space Technology segments.
  • 3Record cash from operations of $3.2 billion.
  • 4Strong total backlog of $78.1 billion, driven by record contract awards of $48.3 billion.
  • 5Repurchased $1.6 billion of common stock.
  • 6Increased quarterly common stock dividend from $0.37 to $0.40 per share.
  • 7Completed redemption of 3.5 million shares of mandatorily redeemable convertible preferred stock.

Frequently Asked Questions

The company reported a net loss of $1.26 billion primarily due to a $3.1 billion non-cash goodwill impairment charge. This charge was recognized in the Shipbuilding and Space Technology segments, largely influenced by adverse equity market conditions and a decline in the company's stock price at the time of the impairment test.

Northrop Grumman achieved record sales of $33.9 billion, representing a 6% increase from the previous year. The company's total backlog also reached a record $78.1 billion, bolstered by strong contract awards totaling $48.3 billion, indicating a healthy pipeline of future business.

The company repurchased $1.6 billion of its common stock during 2008. Additionally, it increased its quarterly common stock dividend from $0.37 to $0.40 per share. A notable event in the capital structure was the conversion and redemption of its 3.5 million shares of mandatorily redeemable convertible preferred stock, which resulted in the issuance of approximately 6.4 million shares of common stock.

Northrop Grumman anticipates 2009 sales to be around $34.5 billion. While the company's business is primarily with the U.S. Government under long-term contracts, providing good visibility, management acknowledges the current economic uncertainties and the potential for adverse impacts on future defense spending levels.