This article first appeared on GuruFocus.
-
Revenue: $10.4 billion in Q3, up 4% year-over-year, 5% organic growth.
-
Segment Operating Margin: Increased to 12.3% in Q3, up 80 basis points.
-
Earnings Per Share (EPS): $7.67, a 10% increase year-over-year.
-
Free Cash Flow: Increased by 72% year-over-year in Q3.
-
Book-to-Bill Ratio: 1.17 for the quarter.
-
Organic Growth Rate: 5% year-over-year.
-
International Growth Rate: 32% year-over-year.
-
Aeronautics Sales: $3.1 billion, up 6% year-over-year.
-
Defense Systems Sales: Nearly $2.1 billion, up 14% year-over-year, 19% organic growth.
-
Mission Systems Sales Growth: Double-digit growth driven by microelectronics programs.
-
Space Systems Sales: $2.7 billion, sequential growth, mid-single-digit decline year-over-year.
-
Operating Income Increase: 11% year-over-year in Q3.
-
Guidance for 2025 Revenue: Revised to $41.7 billion to $41.9 billion.
-
2026 Free Cash Flow Outlook: $3.1 billion to $3.5 billion.
Release Date: October 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
-
Northrop Grumman Corp (NYSE:NOC) achieved mid-single-digit growth and expanded its segment operating margin in the third quarter of 2025.
-
The company reported a strong book-to-bill ratio of 1.17, indicating robust demand for its products and services.
-
International growth was particularly strong, with a 32% increase year over year, contributing to a 20% year-to-date growth in international sales.
-
The B-21 program made significant progress, with the second aircraft entering flight test and discussions underway to accelerate production rates.
-
Northrop Grumman Corp (NYSE:NOC) increased its free cash flow by 72% year over year, aligning with its long-term financial outlook.
-
The company revised its full-year revenue guidance downward due to delayed timing on certain awards and programs.
-
The Space segment faced challenges with revenue growth due to the wind down of two large programs.
-
Higher than expected costs were incurred in producing the EMD flight test aircraft for the B-21 program.
-
The US government shutdown posed potential risks for further delays in program awards and funding.
-
There are ongoing supply chain concerns, particularly related to rare earths, which could impact future operations.
Q: Can you provide more color on the potential impact of F/A-XX and B-21 acceleration on your 2026 outlook? A: Kathy Warden, CEO, explained that neither F/A-XX nor B-21 acceleration is included in the 2026 outlook. Winning the F/A-XX would increase revenue but might be dilutive to earnings due to its development nature. The B-21 ramp would also increase sales but require investment, with potential long-term returns. Guidance will be updated if clarity on these opportunities is achieved.
