Northrop Grumman Reports Strong Q3 and Nine-Month Financial Performance with Increased Sales, Operating Income, and Net Earnings

Northrop Grumman Corporation reported strong financial performance for the third quarter and the first nine months of 2024, with notable increases in sales, operating income, and net earnings compared to the same periods in 2023. For the three months ended September 30, 2024, total sales reached $9,996 million, a 2% increase from $9,775 million in Q3 2023. Year-to-date sales for the nine months ended September 30, 2024, were $30,347 million, reflecting a 6% increase from $28,652 million in the prior year.

Operating income for Q3 2024 was $1,120 million, up 10% from $1,016 million in Q3 2023, while year-to-date operating income increased by 12% to $3,281 million from $2,930 million. Net earnings for the third quarter were $1,026 million, a 9% rise from $937 million in the same quarter of 2023, and for the nine months, net earnings reached $2,910 million, a 12% increase from $2,591 million in 2023. Diluted earnings per share for Q3 2024 were $7.00, up 13% from $6.18, and for the nine months, they increased by 16% to $19.69 from $17.00.

The company’s performance was bolstered by higher sales across its segments, particularly in Aeronautics Systems, Defense Systems, and Mission Systems, despite a decline in Space Systems due to the wind-down of certain programs. The effective tax rate for Q3 2024 decreased to 13.6% from 16.2% in the prior year, primarily due to a net reduction in tax reserves.

Northrop Grumman's backlog as of September 30, 2024, stood at $84.8 billion, with significant new awards totaling $11.7 billion in the third quarter. The company also reported a reduction in unfunded backlog due to terminations in restricted space and Next Generation Interceptor programs.

In terms of cash flow, net cash provided by operating activities for the nine months ended September 30, 2024, was $1,810 million, an increase from $1,445 million in 2023. Free cash flow also saw a significant rise, reaching $859 million compared to $473 million in the previous year. The company’s cash and cash equivalents totaled $3.3 billion as of September 30, 2024.

Strategically, Northrop Grumman has been active in share repurchase programs, with a new authorization of up to $2.5 billion initiated in February 2024. The company also incurred substantial remediation costs related to environmental conditions at former facilities, with ongoing efforts to address these issues.