Summary
Northrop Grumman Corporation (NOC) reported strong financial performance for the first quarter of 2017, demonstrating significant growth in both sales and profitability compared to the prior year. Total sales increased by 5% to $6.27 billion, driven primarily by robust performance in the Aerospace Systems segment. Net earnings saw a substantial 15% increase, reaching $640 million, which translated to a 20% rise in diluted earnings per share to $3.63. This earnings growth was supported by improved operating margins, a favorable shift in operating costs as a percentage of sales, and disciplined share repurchases that reduced the outstanding share count. The company's operating income grew by 13% to $832 million, reflecting effective cost management and a higher operating margin rate of 13.3%. The company continues to execute its strategic priorities, as evidenced by segment performance across Aerospace Systems, Mission Systems, and Technology Services. Despite ongoing uncertainties in the global geopolitical and U.S. political/economic environments, including potential impacts from continuing resolutions and debt ceiling debates, Northrop Grumman's diversified portfolio and strong contract execution position it well. The company also continued its commitment to returning capital to shareholders through share repurchases and dividend payments.
Financial Highlights
47 data points| Revenue | $6.41B |
| Cost of Revenue | $2.98B |
| Gross Profit | $3.43B |
| Operating Income | $853.00M |
| Net Income | $770.00M |
| EPS (Basic) | $4.41 |
| EPS (Diluted) | $4.37 |
| Shares Outstanding (Basic) | 174.80M |
| Shares Outstanding (Diluted) | 176.10M |
Key Highlights
- 1Total sales increased by 5% to $6.27 billion for the three months ended March 31, 2017, compared to $5.96 billion in the prior year period.
- 2Net earnings rose by 15% to $640 million, up from $556 million in the first quarter of 2016.
- 3Diluted earnings per share (EPS) saw a significant 20% increase, reaching $3.63 from $3.03 in the prior year.
- 4Operating income grew by 13% to $832 million, with operating margin rate improving to 13.3% from 12.4%.
- 5Aerospace Systems segment was a key driver of sales growth, with a 13% increase year-over-year, primarily due to higher volume on Manned Aircraft programs.
- 6The company repurchased $229 million of common stock during the quarter, contributing to a reduction in weighted-average shares outstanding.
- 7Cash used in operating activities increased to $439 million, which is noted as consistent with historical Q1 trends and a net use of cash expected to be weighted towards the second half of the year.