Summary
Northrop Grumman Corporation's 2010 10-K filing for the period ending December 30, 2009, highlights a company deeply integrated into the U.S. defense and security landscape. With approximately 91% of its revenue derived from U.S. government contracts, the company's performance is intrinsically linked to U.S. defense spending and priorities. In 2009, Northrop Grumman navigated a complex economic environment, reporting total revenues of $33.8 billion, a modest increase from the previous year. The company continued its strategic focus on core defense and aerospace businesses, streamlining its operating segments and making targeted acquisitions and dispositions, including the significant sale of its Advisory Services Division (ASD). Financially, the company demonstrated resilience, maintaining a strong backlog of $69.2 billion at the close of 2009, indicating a solid foundation for future revenue. Despite increased pension costs and operational investments, Northrop Grumman managed its liquidity effectively and continued to return value to shareholders through dividends and share repurchases. Key operational segments like Aerospace Systems and Electronic Systems showed revenue growth, while Shipbuilding faced challenges but was impacted by a significant goodwill impairment in the prior year. For investors, the filing underscores Northrop Grumman's role as a critical defense contractor with a diversified portfolio of advanced technologies and services. Investors should monitor U.S. defense budget allocations, program wins and losses, and the company's ability to manage complex, long-term government contracts. The company's reliance on the U.S. government as its primary customer presents both stability and concentration risk, with potential impacts from regulatory changes, budget constraints, and geopolitical factors.
Financial Highlights
51 data points| Revenue | $27.65B |
| Cost of Revenue | $12.65B |
| Gross Profit | $15.00B |
| R&D Expenses | $588.00M |
| Operating Income | $2.27B |
| Net Income | $1.69B |
| EPS (Basic) | $5.28 |
| EPS (Diluted) | $5.21 |
| Shares Outstanding (Basic) | 319.20M |
| Shares Outstanding (Diluted) | 323.30M |
Key Highlights
- 1Total revenues reached $33.8 billion for the year ended December 30, 2009, with 91% derived from U.S. Government contracts.
- 2The company reported a total backlog of $69.2 billion at the end of 2009, indicating strong future revenue potential.
- 3Northrop Grumman streamlined its operations into five key segments: Aerospace Systems, Electronic Systems, Information Systems, Shipbuilding, and Technical Services.
- 4The Advisory Services Division (ASD) was sold for $1.65 billion in cash in December 2009, with a net gain recognized.
- 5Operating income was $2.5 billion, significantly improved from a loss in the prior year primarily due to a $3.1 billion goodwill impairment charge recorded in 2008.
- 6Diluted earnings per share from continuing operations were $4.87 for 2009, a substantial increase from a loss in 2008.
- 7The company repurchased 23.1 million shares of common stock for $1.1 billion during 2009 and increased its share repurchase authorization by $1.1 billion.