Beat
FY2024 sales reached $41.0B, segment margin 11.1%, EPS $26.08 and free cash flow $2.6B. Q4 revenue of $10.7B fell 3%, while EPS of $6.39 modestly beat. No new B-21 or Sentinel charges were recorded and backlog reached $91.5B.
[AS-050]Northrop Grumman
Q4 2024 / FY2024: A record $91.5B backlog and absence of new B-21 or Sentinel charges underpinned a stable 2025 outlook, though the reaction remained muted.
ResultBeatGuidanceMixed / newly framedEnvironmentimproving
Investment snapshot
What happened and why it mattered
Mixed / newly framed
2025 sales were $42.0–42.5B, segment operating income $4.65–4.80B, EPS $27.85–28.25 and FCF $2.85–3.25B.
[AS-050]No clear inflection
The guide implied modest sales and earnings growth plus a cash step-up, with program execution rather than demand the key variable.
[AS-050]+0.4%
The small move reflected an in-line outlook and relief that major programs were clean, not a meaningful estimate reset.
[MKT-001]Results versus expectations
The print and the three most important read-throughs
FY2024 sales reached $41.0B, segment margin 11.1%, EPS $26.08 and free cash flow $2.6B. Q4 revenue of $10.7B fell 3%, while EPS of $6.39 modestly beat. No new B-21 or Sentinel charges were recorded and backlog reached $91.5B.
- 1
FY2024 sales reached $41.0B, segment margin 11.1%, EPS $26.08 and free cash flow $2.6B.
- 2
Q4 revenue of $10.7B fell 3%, while EPS of $6.39 modestly beat.
- 3
No new B-21 or Sentinel charges were recorded and backlog reached $91.5B.
Guidance bridge
GuidanceMixed / newly framedLatest outlook and KPI implications
2025 sales were $42.0–42.5B, segment operating income $4.65–4.80B, EPS $27.85–28.25 and FCF $2.85–3.25B.
| Metric | Prior | Latest | Consensus | Delta | Status | Reason / implication |
|---|---|---|---|---|---|---|
| 2025 sales | Preliminary 3–4% growth | $42.0–42.5B | Approximately midpoint | Formalized | New formal guide | Backlog conversionAbout 3% growth |
| 2025 segment operating income | No prior formal range | $4.65–4.80B | Not consistently available | New | New | Volume and mixRoughly stable margin |
| 2025 EPS | No prior formal range | $27.85–28.25 | Near midpoint | New | New | Operating growthHigh-single-digit growth |
| 2025 free cash flow | $2.85–3.25B preliminary | $2.85–3.25B | Not consistently available | No change | Reiterated | Working-capital normalizationImproves from $2.6B |
| Backlog | $84.8B Q3 | $91.5B | Not applicable | +$6.7B | Directional | AwardsImproves multi-year sales visibility |
Management signal — paraphrased
The environment supported 3–4% organic growth, margin expansion and a step-up in FCF as backlog converted.
Implied cadence
The guide implied modest sales and earnings growth plus a cash step-up, with program execution rather than demand the key variable.
Stock reaction
Why the shares moved
The small move reflected an in-line outlook and relief that major programs were clean, not a meaningful estimate reset.
- Record backlog
- No program charges
- 2025 guide near Street
Did the reaction persist?
[MKT-001]The stock gained about 0.4% on day one and was roughly 1.9% lower after five sessions.
Adjusted-close reaction
Independently calculated adjusted-close returns
| Window | Stock | vs benchmark | vs peers |
|---|---|---|---|
| 1D | +0.4% | -0.1% | -1.3% |
| 2D | +1.2% | +1.2% | -0.8% |
| 5D | -1.9% | -2.3% | -2.8% |
Market environment delta
EnvironmentimprovingWhat management said about the operating backdrop
Record awards, international demand and priority-program wins strengthened visibility as capacity investment moved past its peak.
- Customer demandImproving
Management sees "strong bipartisan support for national security" and global budgets rising to counter peer threats
OutlookDemand rising in crewed/uncrewed aircraft, weapons, missile defenseKPI implicationConfidence in 3-4% organic growth and >1x book-to-billStatement · High confidence · AS-ME-050 - Volumes / order activityImproving
Q4 book-to-bill 1.62x , FY 1.23x , record backlog $91.5bn (+9%); $17.3bn Q4 net awards
Outlook~40% of backlog to convert within 12 monthsKPI implicationRecord backlog anchors forward revenue visibilityQuantified datapoint · High confidence · AS-ME-050 - Regional / end-market conditionsImproving
International book-to-bill 1.4x ; now expected to grow faster than U.S. in 2025, led by IBCS, E-2D, Triton
OutlookDouble-digit international growth targeted through the decadeKPI implicationLong-tail upside to 2026-2027 growth and margin mixStatement · High confidence · AS-ME-050
- Channel / inventory conditionsStable
~40% of backlog expected as revenue over next 12 months, ~65% over 24 months, remainder thereafter
OutlookSteady conversion; Q1 seasonally light (~23% of sales)KPI implicationGoverns quarterly revenue phasing and 2H-weighted 2025 rampQuantified datapoint · Medium confidence · AS-ME-050 - Input costs / capacityImproving
Removed >$200mn of cost in 2024 via digital tools and efficiencies; rapid capacity added in solid rocket motors, weapons, satellites
OutlookCapex declining ~$275mn to ~$1.5bn in 2025 off peakKPI implicationDrove $350mn net favorable EACs; supports margin and FCFStatement · High confidence · AS-ME-050
- CompetitionImproving
Competitive TACAMO win and award of B-21 LRIP Lot 2 in Q4 reinforced incumbency on high-priority programs
OutlookContinued strong political support for B-21 (~8% of 2025 sales)KPI implicationSupports multi-year Aeronautics growth and backlog durabilityStatement · High confidence · AS-ME-050 - PricingMixed
Mix shifting toward international and production; ~50% of sales now fixed-price with NTE lots above LRIP pricing expected profitable
OutlookFavorable mix a multi-year margin driver as programs matureKPI implicationUnderpins ~10bps 2025 and larger 2026 segment margin expansionStatement · Medium confidence · AS-ME-050
Evidence and confidence
Source map
Consensus snapshots are reconstructed from contemporaneous broker notes; the flattened AlphaSense export does not preserve stable document URLs.
AlphaSense synthesis
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Open source ↗AlphaSense market-environment synthesis
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