What is the primary driver for the increase in sales revenue?

The increase in sales and service revenues was primarily driven by higher sales in the Aerospace, Electronics, and Mission Systems segments. The Aerospace segment benefited from programs like UCAS-D and B-2, while Electronics saw growth in areas like Land Forces and Aerospace Systems. Mission Systems also contributed with increased sales in ISR and C3 programs.

What factors led to the decrease in operating income?

The decrease in operating income was mainly due to significant charges within the Shipbuilding segment. This included cost growth and schedule delays on LPD ships due to Hurricane Ike's impact on a subcontractor, a more conservative risk assessment on Gulf Coast shipyard programs, and a performance improvement adjustment on the LHD-8 contract. Additionally, the Information Technology segment reported a negative performance adjustment of $57 million on the NYCWiN program.

How has the company's liquidity position changed?

The company's liquidity has improved. Net cash provided by operating activities for the third quarter of 2008 increased to $1.37 billion from $1.01 billion in the same period of 2007. This was largely due to improved trade working capital and higher patent infringement settlements.

What is the significance of the 3001 International acquisition?

The acquisition of 3001 International, Inc. for approximately $92 million strengthens Northrop Grumman's capabilities in geospatial data production and analysis. This acquisition is expected to be reported within the Information Technology segment and complements the company's offerings for government intelligence, defense, and civilian customers.

NOC 10-Q Quarterly Report Q3 FY2008 — Revenue, Net Income, EPS

Summary

Northrop Grumman Corporation (NOC) reported third-quarter 2008 results showing a 6% increase in sales and service revenues to $8.38 billion, driven by growth across most segments, particularly Aerospace and Electronics. However, operating income saw a 6% decrease to $771 million, primarily impacted by significant charges in the Shipbuilding segment related to the LHD-8 contract and Hurricane Ike's impact on a subcontractor. Despite these headwinds, the company's liquidity remained strong, with net cash provided by operating activities increasing to $1.37 billion for the quarter. The company also completed the conversion and redemption of its mandatorily redeemable convertible preferred stock, strengthening its capital structure.

Financial Highlights

28 data points

Beta

Revenue

$8.38B

0.6% Gross Margin

Net Income

$512.00M

0.1% Net Margin

EPS (Diluted)

$1.51

Cash & Equivalents

$1.02B

Free Cash Flow

$1.21B

Financial Statements

Beta

Revenue	$8.38B
Cost of Revenue	$3.68B
Gross Profit	$4.70B
Operating Income	$771.00M
Net Income	$512.00M
EPS (Basic)	$1.53
EPS (Diluted)	$1.51
Shares Outstanding (Basic)	334.20M
Shares Outstanding (Diluted)	340.10M

Key Highlights

1Total sales and service revenues increased by 6.5% to $8.38 billion for the third quarter of 2008 compared to the prior year's $7.87 billion.
2Operating income decreased by 4.5% to $771 million in Q3 2008 from $806 million in Q3 2007.
3Diluted earnings per share from continuing operations increased to $1.50 in Q3 2008 from $1.41 in Q3 2007.
4The Shipbuilding segment experienced a significant operating income decline of 36% in Q3 2008, largely due to charges related to the LHD-8 contract and subcontractor issues stemming from Hurricane Ike.
5Net cash provided by operating activities increased to $1.37 billion for the third quarter of 2008, up from $1.01 billion in the same period of 2007.
6The company acquired 3001 International, Inc. in early October 2008 for approximately $92 million to enhance its geospatial data capabilities within the Information Technology segment.

NORTHROP GRUMMAN CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2008

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions