01—Abstract
Summary
Summary of the 10-Q filed October 21, 2009. Cited figures are marked; the original filing is the authoritative source.
Northrop Grumman Corporation reported its third-quarter and year-to-date results for 2009.
For the third quarter, total sales and service revenues increased to $8.73 billiona, up from $8.38 billion in the prior year's quarter. Net earnings for the quarter were $490 million, resulting in basic earnings per share of $1.55, a slight increase from $1.53 in Q3 2008.
For the nine months ended September 30, 2009, sales grew to $26.00 billionb from $24.73 billion in the same period of 2008. Net earnings remained flat at $1.27 billion, with basic earnings per share increasing to $3.95 from $3.77 in the prior year, reflecting a reduction in weighted-average shares outstanding.
02—Key points
Key Highlights
- Total sales and service revenues increased by 4.1% to $8.73 billion for the third quarter of 2009 compared to the prior year.
- Net earnings for the third quarter slightly decreased to $490 million from $512 million in Q3 2008.
- Basic earnings per share increased to $1.55 in Q3 2009 from $1.53 in Q3 2008, driven by a reduction in outstanding shares.
- The company issued $850 million in unsecured senior obligations during the nine months ended September 30, 2009.
- Net cash provided by operating activities decreased significantly to $544 million in Q3 2009 from $1.37 billion in Q3 2008, primarily due to voluntary pension contributions.
- Share repurchases continued, with 4.7 million shares bought back in the third quarter of 2009 under an existing authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2009, Northrop Grumman Corp kept $0.06.
- Revenue$8.35B100.0%
- Cost of revenue−$4.03B48.2%
- Gross profit$4.32B51.8%
- Operating costs−$3.70B44.4%
- Operating income$619.0M7.4%
- Interest, other & tax−$129.0M1.5%
- Net income$490.0M5.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2009filed October 21, 2009Financial Statements
Q3 FY2009 against Q3 FY2008
| Line item | Q3 FY2009Q3 FY2008 | Change |
|---|---|---|
| Revenue | $8.35B$8.38B | −0.4% |
| Cost of Revenue | $4.03B$3.68B | +9.4% |
| Gross Profit | $4.32B$4.70B | −8.0% |
| Operating Income | $619.00M$771.00M | −19.7% |
| Net Income | $490.00M$512.00M | −4.3% |
| EPS (Basic) | $1.55$1.53 | +1.3% |
| EPS (Diluted) | $1.53$1.51 | +1.3% |
| Shares Outstanding (Basic) | 317.10M334.20M | −5.1% |
| Shares Outstanding (Diluted) | 320.60M340.10M | −5.7% |
05—Questions
Frequently Asked Questions
How did Northrop Grumman's revenue and earnings perform in the third quarter of 2009 compared to the same period in 2008?
Northrop Grumman reported an increase in sales and service revenues for the third quarter of 2009 to $8.73 billion, up from $8.38 billion in the prior year. However, net earnings saw a slight decrease, coming in at $490 million compared to $512 million in the third quarter of 2008. Despite the dip in net earnings, basic earnings per share saw a modest increase to $1.55 from $1.53, primarily due to a reduction in the number of weighted-average common shares outstanding.
What are the key drivers behind the change in net cash from operating activities?
The significant decrease in net cash provided by operating activities from $1.37 billion in Q3 2008 to $544 million in Q3 2009 is largely attributable to voluntary pension contributions made by the company. For the nine-month period, this decrease was $972 million, mainly due to $800 million in voluntary pension contributions and higher trade working capital requirements in 2009.
What significant corporate actions did Northrop Grumman undertake regarding its capital structure and shareholder returns?
During the nine months ended September 30, 2009, Northrop Grumman issued $850 million in unsecured senior obligations to fund general corporate purposes, including debt repayment, acquisitions, and share repurchases. The company also continued its share repurchase program, buying back approximately 4.7 million shares in the third quarter of 2009, with $282 million remaining under its existing authorization. Additionally, the company increased its quarterly common stock dividend from $0.40 to $0.43 per share in May 2009.
How did the company's segment performance contribute to the overall results?
All operating segments—Aerospace Systems, Electronic Systems, Information Systems, Shipbuilding, and Technical Services—reported higher sales and service revenues for both the third quarter and the nine-month period ended September 30, 2009, compared to the prior year. Segment operating income also showed growth year-over-year for the nine-month period, driven by improved performance in most segments, although Electronic Systems saw a decrease in operating income for the third quarter due to lower performance, partially offset by royalty income in the prior year.
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