Northrop Grumman Corporation · NYSE:NOC
Northrop Grumman — Q2 2024 Earnings Presentation
17 slides from Northrop Grumman's earnings presentation, Jul 25, 2024
Slide 1: Second Quarter 2024 Conference Call
NORTHROP GRUMMAN Second Quarter 2024 Conference Call Kathy Warden Dave Keffer July 25, 2024 Chair, Chief Executive Officer and President Corporate Vice President and Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and the information we are incorporating by reference, and statements to be made on the earnings conference call, Business and Operational Risks contain or may contain statements that constitute “forward-looking statements” within the meaning of the Priva
Slide 3: Q2 Highlights
Q2 Highlights Enterprise Spotlight • Diverse portfolio of innovative technologies, complemented by mature production programs, provide strong outlook for continued profitable growth $83.1B Q2 Backlog • Department of Defense certified the Sentinel program, determining that continuation of the program
Slide 4: Q2 Sales
Q2 Sales 7% $9,083 Three Months Ended June 30 $8,720 ($M) 2023 2024 ▲% Aeronautics Systems $2,595 $2,963 14% Defense Systems 1,420 1,513 7% $10,218 $9,576 Mission Systems 2,641 2,773 5% Space Systems 3,488 3,573 2% Intersegment Eliminations (568) (604) Total $9,576 $10,218 7% Q2 2023 Q2 2024 Sales g
Slide 5: Q2 Segment Operating Income
Q2 Segment Operating Income(1) 5% Three Months Ended June 30 ($M) 2023 2024 ▲% Aeronautics Systems $278 $295 6% Defense Systems 166 204 23% $1,101 $1,052 Mission Systems 401 361 (10)% Space Systems 283 324 14% Intersegment Eliminations (76) (83) Total $1,052 $1,101 5% Q2 2023 Q2 2024 Remain laser fo
Slide 6: Q2 Diluted EPS Bridge
Q2 Diluted EPS Bridge 19% Q2 2023 $5.34 Segment Performance 0.43 $6.36 Net Pension(1) 0.33 $5.34 Corporate Unallocated 0.24 All Other 0.02 Q2 2024 $6.36 Q2 2023 Q2 2024 Strong segment performance and growth in total operating income drove a 19% increase in EPS 1. Net Pension tax effected on a 21% fe
Slide 7: 2024 Segment Guidance
2024 Segment Guidance(1) As of 7/25/2024 Sales ($B) OM Rate % Aeronautics Systems High $11 Mid to High 9% Defense Systems ~$9 ~10% Mission Systems Mid $11 Low to Mid 14% Space Systems Mid to High $11 Low 10% Eliminations ~($2.7) Low 13% Segment guidance now reflects the company realignment effective
Slide 8: 2024 Company Level Guidance
2024 Company Level Guidance(1) $ in millions, except per share amounts As of 4/25/2024 As of 7/25/2024 Sales $40,800 — $41,200 $41,000 — $41,400 Segment operating income(2) $4,475 — $4,550 $4,500 — $4,575 Total Net FAS/CAS pension adjustment(3) ~$700 ~$700 Unallocated corporate expense: Intangible a
Slide 9: Key Takeaways
Key Takeaways Strong global defense budget • We remain laser focused on performance as we deliver critical outlook capabilities in partnership with our customers Broad portfolio well • Visible path to grow margins over coming years driven by improvements in macro environment, digitally enabled effic
Slide 10: Appendix
Appendix Second Quarter 2024 Conference Call 10
Slide 11: Financial Guidance
Financial Guidance Financial guidance, as well as outlook, trends, expectations and other forward-looking statements provided by the company for 2024 and beyond, reflect the company's judgment based on the information available to the company at the time of this presentation. The company’s financial
Slide 12: Segment Realignment: Segment Sales
Segment Realignment Segment Sales 2022 2023 2024 AS REPORTED(1) Three Months Ended Three Months Ended Total Year Total Year ($M) Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Aeronautics Systems $10,531 $2,515 $2,595 $2,766 $2,910 $10,786 $2,969 $2,963 Defense Systems 5,579 1,376 1,420 1,421 1,645 5,862
Slide 13: Segment Realignment: Segment Operating Income
Segment Realignment Segment Operating Income(3) 2022 2023 2024 AS REPORTED(1) Three Months Ended Three Months Ended Total Year Total Year ($M) Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Aeronautics Systems $1,116 $237 $278 $283 $(1,271) $(473) $297 $295 Defense Systems 664 160 166 182 202 710 177 204
Slide 14: Non-GAAP Definitions
Non-GAAP Definitions Non-GAAP Financial Measures Disclosure: This presentation contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in this presentation. Definitions for the non-GAA
Slide 15: Non-GAAP Reconciliations: Segment Operating Income
Non-GAAP Reconciliations Segment Operating Income Three Months Ended June 30 Six Months Ended June 30 ($M) 2023 2024 2023 2024 Total sales $9,576 $10,218 $18,877 $20,351 Operating income $967 $1,090 $1,914 $2,161 Operating margin rate 10.1% 10.7% 10.1% 10.6% Reconciliation to segment operating incom
Slide 16: Non-GAAP Reconciliations: Free Cash Flow
Non-GAAP Reconciliations Free Cash Flow (1) Three Months Ended Six Months Ended June 30 June 30 ($M) 2023 2024 ▲% 2023 2024 ▲% Net cash provided by operating activities $919 $1,425 55% $217 $719 231% Capital expenditures (304) (320) 5% (613) (590) (4)% (1) Free cash flow $615 $1,105 80% $(396) $129
Slide 17: Second Quarter 2024 Conference Call
Second Quarter 2024 Conference Call 17