The third quarter 2023 financial report of Northrop Grumman (NYSE: NOC) is out and in the three months that ended Sept. 30, sales climbed nine percent to $9.8 billion versus Q2 2022, while net earnings increased two percent year-over-year to $937 million. The total backlog of the aerospace and defense company also rose to a record-high $84 billion.
Northrop said other business highlights for the quarter include $15 billion in net awards and a 20 percent year-over-year increase in operating income to $1.02 billion. The company also reaffirmed its full-year earnings and cash flow guidance.
Kathy Warden, chair, CEO and president of Northrop, underscored the growth of the company’s aeronautics, defense, mission and space systems businesses and said the new backlog record strengthens the foundation of its future growth.
“Based on our year-to-date results and increasing demand for our products, we are raising our 2023 sales guidance,” the eight-time Wash100 awardee added. “We are also providing an initial 2024 outlook that reflects our expectation for solid revenue, operating income and free cash flow growth.”
As of Oct. 26, Northrop raised its sales guidance to $39 billion (six percent year-over-year growth) and hopes to end the year with an Adjusted FCF between $1.85 billion and $2.15 billion.
Regarding cash flows, Northrop expects more than 20 percent compound annual growth rate next year and through 2025, with further expansion in the ensuing years. With capex reducing in 2025 and headwinds dissipating, Warden emphasized that cash flow growth is an important milestone.
