Summary
Northrop Grumman Corporation reported strong performance for the first quarter of 2019, with total sales reaching $8.19 billion, a significant increase of 22% compared to the same period last year. This growth was primarily driven by the inclusion of the recently acquired Innovation Systems segment, which contributed $1.4 billion in sales, and higher sales within the Aerospace Systems segment. Net earnings also saw a positive trend, increasing by 3% to $863 million, resulting in diluted earnings per share of $5.06, up from $4.79 in the prior year. The company's operating income grew by 10% to $936 million, though the operating margin rate saw a slight decrease to 11.4% from 12.6%. This was largely due to an increase in unallocated corporate expenses, primarily related to intangible asset amortization and depreciation from the acquisition. Despite increased corporate expenses, segment operating income showed robust growth of 27%, highlighting the strong underlying performance of the individual business units. Financially, the company's cash flow from operations was negatively impacted by changes in trade working capital, including the completion of an ERP conversion and the integration of Innovation Systems. This resulted in net cash used in operating activities of $913 million for the quarter. However, the company remains adequately capitalized, with sufficient cash and credit facilities to fund operations and strategic initiatives.
Financial Highlights
48 data points| Revenue | $8.19B |
| Operating Income | $936.00M |
| Net Income | $863.00M |
| EPS (Basic) | $5.08 |
| EPS (Diluted) | $5.06 |
| Shares Outstanding (Basic) | 170.00M |
| Shares Outstanding (Diluted) | 170.70M |
Key Highlights
- 1Total sales increased by 22% to $8.19 billion, significantly boosted by the addition of the Innovation Systems segment ($1.4 billion) and growth in Aerospace Systems.
- 2Net earnings rose by 3% to $863 million, leading to a 6% increase in diluted earnings per share to $5.06.
- 3Operating income grew by 10% to $936 million, although the operating margin rate slightly decreased to 11.4% due to higher unallocated corporate expenses related to the Orbital ATK acquisition.
- 4Segment operating income demonstrated strong growth of 27%, indicating healthy performance across the company's core business segments.
- 5The company's backlog stood at $57.3 billion as of March 31, 2019, reflecting a solid pipeline of future revenue.
- 6Net cash used in operating activities was $913 million, primarily due to working capital changes and the integration of Innovation Systems, but the company expects recovery in the second quarter.
- 7The company repurchased approximately 1.1 million shares of common stock during the quarter for $289 million.