Northrop Grumman Corp (NOC, Financial) released its Q3 2023 earnings report on October 26, 2023. The company reported a 9% increase in sales to $9.8 billion, compared to $9.0 billion in the same quarter of 2022. The increase in sales reflects the continued strong demand for NOC's products and services. Net earnings for Q3 2023 totaled $937 million, or $6.18 per diluted share, compared to $915 million, or $5.89 per diluted share, in Q3 2022.
Financial Performance
Northrop Grumman Corp (NOC, Financial) reported net awards of $15 billion, with a book to bill ratio of 1.53. The total backlog rose to a record $84 billion. The company's operating income increased by 20%, and segment operating income increased by 8%. The diluted earnings per share were $6.18, with an operating cash flow of $1.2 billion.
Increased Sales Guidance
NOC increased its 2023 sales guidance by $400 million to approximately $39 billion. The company also reaffirmed its diluted EPS and free cash flow guidance. This increase in sales guidance is based on the company's year-to-date results and increasing demand for its products.
Segment Performance
All four sectors of the company reported higher sales, contributing to the 9% increase in total sales. The Aeronautics Systems sector reported a 9% increase in sales, while the Defense Systems sector reported a 6% increase. The Mission Systems sector reported a 7% increase, and the Space Systems sector reported an 11% increase in sales.
Net Earnings and Diluted EPS
Third quarter 2023 net earnings increased by 2%, primarily due to $172 million of higher operating income and a $97 million gain recognized upon the sale of the company's minority investment in an Australian business. The diluted earnings per share increased by 5%, reflecting a 2% increase in net earnings and a 2% reduction in weighted-average diluted shares outstanding.
Outlook
Based on the company's year-to-date results and increasing demand for its products, NOC is raising its 2023 sales guidance. The company is also providing an initial 2024 outlook that reflects its expectation for solid revenue, operating income, and free cash flow growth.
Explore the complete 8-K earnings release (here) from Northrop Grumman Corp for further details.
