Northrop Grumman Reports Solid Q4 2024 Earnings and Future Growth

Northrop Grumman's Q4 2024 earnings reveal strong backlog and revenue projections. The company highlights a solid outlook for 2025 with expected growth across segments, suggesting resilience in stock performance.

Date: 30-01-2025

AI Rating: 7

Financial Performance and Key Metrics

Northrop Grumman delivered a strong Q4 2024 and is expected to report continued financial performance in 2025. The company achieved a record backlog of approximately $91.5 billion, indicating solid demand for its services. This figure reflects a book-to-bill ratio of 1.23 times and 1.4 times in international markets, which is highly favorable for future revenue growth.

Earnings Per Share (EPS)

The mark-to-market adjusted EPS was reported at $26.08, exceeding the high end of guidance. This performance points to the company's ability to generate higher net income through operational efficiencies and effective management.

Free Cash Flow (FCF)

Northrop Grumman generated over $2.6 billion in free cash flow for the year, representing a 25% increase compared to 2023, near the high end of its guidance. This is a positive indicator for potential dividend payments and reinvestment in business growth, which may contribute to a favorable perception from investors.

Revenue Growth and Margins

The company experienced over 4% growth in sales for 2024. The guidance for 2025 indicates anticipated organic growth of 3% to 4%. Segmented margins are projected to expand as operational efficiencies continue, which supports the growth outlook. The expected segment operating margin rate is set to expand to mid to high 9% across various divisions due to improved performance measures.

Given all these positive indicators, Northrop Grumman appears well-positioned for continued strong performance, making it attractive to investors looking for stability in the defense sector.

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