10-QPeriod: Q3 FY2025

NORTHROP GRUMMAN CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2025

Filed October 21, 2025For Securities:NOC

Summary

Northrop Grumman Corporation (NOC) reported solid third-quarter 2025 results, with total sales increasing by 4% to $10.42 billion, driven by growth across multiple segments, particularly Mission Systems and Defense Systems. Net earnings saw a healthy 7% increase to $1.10 billion, translating to diluted earnings per share of $7.67, up 10% year-over-year. This performance reflects effective cost management and favorable contract adjustments, though the year-to-date net earnings show a 5% decline primarily due to a significant B-21 program loss provision in Q1 2025. The company's financial position remains robust, with total assets and liabilities largely stable. Significant capital deployment activities include $1.17 billion in common stock repurchases and $964 million in dividends paid year-to-date. The company also secured a new $3.0 billion revolving credit facility. Despite ongoing geopolitical uncertainties and potential impacts from government shutdowns, Northrop Grumman's substantial backlog of $91.4 billion provides visibility for future revenue. Investors should monitor the progression of major programs like B-21 and Sentinel, as well as the broader defense spending environment.

Financial Highlights

51 data points
Beta

Revenue

$10.42B

Net Income

$1.10B

10.6% Net Margin

EPS (Diluted)

$7.67

Total Assets

$49.30B

Cash & Equivalents

$1.96B

Free Cash Flow

$1.26B

Financial Statements
Beta
Revenue$10.42B
Operating Expenses$9.18B
Operating Income$1.24B
Net Income$1.10B
EPS (Basic)$7.69
EPS (Diluted)$7.67
Shares Outstanding (Basic)143.10M
Shares Outstanding (Diluted)143.50M

Key Highlights

  • 1Total sales for Q3 2025 increased by 4% to $10.42 billion, with year-to-date sales remaining comparable to the prior year.
  • 2Net earnings for Q3 2025 rose 7% to $1.10 billion, resulting in diluted EPS of $7.67 (up 10% year-over-year).
  • 3Operating income for Q3 2025 increased 11% to $1.24 billion, driven by segment performance and favorable contract adjustments.
  • 4The company's backlog stood strong at $91.4 billion as of September 30, 2025, providing a significant revenue runway.
  • 5Northrop Grumman completed the sale of its training services business, recording a pre-tax gain of $231 million year-to-date.
  • 6Year-to-date net cash provided by operating activities decreased by 52% to $860 million, largely due to higher net cash taxes and working capital changes.
  • 7Shareholder returns were evident through $1.17 billion in common stock repurchases and $964 million in dividends paid year-to-date.

Frequently Asked Questions

The 4% increase in sales for Q3 2025 was primarily driven by higher sales in Mission Systems, Defense Systems, and Aeronautics Systems. This was partially offset by lower sales in Space Systems, which is attributed to the wind-down of certain Space programs.

The B-21 program significantly impacted year-to-date results due to a $477 million loss provision recognized in the first quarter of 2025. While the company made no significant changes to the projected loss in Q3, it experienced higher-than-expected costs for EMD flight test aircraft, which were largely offset by a contract restructure.

Northrop Grumman operates in a heightened global security environment with increased geopolitical tensions. The company believes its capabilities are well-positioned to meet evolving national security priorities. While aware of potential impacts from government shutdowns and budget uncertainties, the company expects continued demand for its products and services.

The company aims to convert operating income into cash for various needs, including working capital, investments, and shareholder returns. Year-to-date, $1.17 billion was used for share repurchases and $964 million for dividends. A new $3.0 billion revolving credit facility was also secured to support liquidity.