# Northrop Grumman Corporation (NOC) Q2 2025 Financial Results Summary
**Release Date: July 22, 2025**
Northrop Grumman Corporation (NYSE: NOC) reported its financial results for Q2 2025, indicating a positive performance across several key metrics. Here are the highlights:
### Sales and Revenue
– **Total Sales:** Increased by **1%** to **$10.4 billion** compared to **$10.2 billion** in Q2 2024.
– **Segment Sales Growth:**
– **Aeronautics Systems:** Up **2%** to **$3.1 billion**.
– **Defense Systems:** Increased **7%** to **$1.99 billion**.
– **Mission Systems:** Grew **14%** to **$3.16 billion**.
– **Space Systems:** Decreased **12%** to **$2.65 billion**.
### Earnings
– **Net Earnings:** Rose **25%** to **$1.2 billion**, or **$8.15** per diluted share, up from **$940 million** or **$6.36** per diluted share in Q2 2024.
– **Diluted EPS:** Grew by **28%** from the prior period, largely aided by a **$1.04** per share benefit from the sale of the training services division.
### Operating Performance
– **Operating Income:** Increased **31%** to **$1.425 billion** from **$1.09 billion** in Q2 2024.
– **Operating Margin Rate:** Improved by **310 basis points** to **13.8%**, compared to **10.7%** in the prior year.
– **Segment Operating Income:** Up **11%** overall to **$1.219 billion**, with a margin rate of **11.8%**, an increase from **10.8%**.
### Cash Flow and Capital Management
– **Free Cash Flow:** Declined **42%** to **$637 million** from **$1.11 billion** in Q2 2024, primarily due to increased cash taxes.
– **Net Cash from Operating Activities:** Turned negative at **-$697 million**, a significant decrease compared to a positive **$719 million** in the same quarter last year.
– **Capital Expenditures:** Reduced by **28%** to **$231 million** from **$320 million** in Q2 2024.
### Dividends and Share Repurchases
– **Returned to Shareholders:** Over **$700 million** was returned through share repurchases and dividends in Q2 2025.
– No details were provided on the specific dividend amount per share declared during this quarter.
### International and Future Outlook
– **International Sales Growth:** Increased by **18%** in the quarter, underscoring robust demand for Northrop Grumman’s offerings.
– **Revised 2025 Guidance:**
– **Sales:** Expected in the range of **$42.05 – $42.25 billion**.
– **Segment Operating Income:** Forecasted to be **$4,275 – $4,375 million**.
– **MTM-adjusted EPS:** Forecasted to range between **$25.00 – $25.40**.
– **Free Cash Flow:** Projected to be between **$3,050 – $3,350 million**.
### Backlog and Awards
– **Total Backlog:** Stood at **$89.7 billion**, down **2%** from **$91.5 billion** in December 2024.
– **Net Awards in Q2 2025:** Totaled **$7.4 billion**, with significant contracts in the Mission Systems, Defense Systems, and Aeronautics Systems sectors.
### Conclusion
Northrop Grumman’s Q2 2025 results reflect solid growth in sales and earnings, driven by improved operational efficiency and strategic performance across various segments, despite challenges in certain areas like space systems. The company’s commitment to returning value to shareholders and increasing guidance for key financial metrics highlights a positive outlook for the remainder of the year.
### CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
| $ in millions, except per share amounts | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| Sales | 2025 | 2024 | 2025 | 2024 |
| Product | $8,258 | $8,076 | $15,779 | $16,178 |
| Service | 2,093 | 2,142 | 4,040 | 4,173 |
| Total sales | 10,351 | 10,218 | 19,819 | 20,351 |
| Operating costs and expenses | ||||
| Product | 6,526 | 6,388 | 12,892 | 12,799 |
| Service | 1,615 | 1,639 | 3,137 | 3,228 |
| General and administrative expenses | 1,016 | 1,101 | 2,023 | 2,163 |
| Total operating costs and expenses | 9,157 | 9,128 | 18,052 | 18,190 |
| Gain on sale of business | 231 | — | 231 | — |
| Operating income | 1,425 | 1,090 | 1,998 | 2,161 |
| Other (expense) income | ||||
| Interest expense | -173 | -154 | -329 | -300 |
| Non-operating FAS pension benefit | 137 | 167 | 267 | 335 |
| Other, net | 38 | 43 | 69 | 81 |
| Earnings before income taxes | 1,427 | 1,146 | 2,005 | 2,277 |
| Federal and foreign income tax expense | 253 | 206 | 350 | 393 |
| Net earnings | $1,174 | $940 | $1,655 | $1,884 |
| Basic earnings per share | $8.17 | $6.37 | $11.48 | $12.72 |
| Weighted-average common shares outstanding, in millions | 143.7 | 147.5 | 144.2 | 148.1 |
| Diluted earnings per share | $8.15 | $6.36 | $11.45 | $12.69 |
| Weighted-average diluted shares outstanding, in millions | 144.0 | 147.7 | 144.5 | 148.5 |
| Net earnings (from above) | $1,174 | $940 | $1,655 | $1,884 |
| Other comprehensive income (loss), net of tax | ||||
| Change in cumulative translation adjustment | 7 | -1 | 9 | — |
| Change in other, net | 11 | -2 | 19 | -18 |
| Other comprehensive income (loss), net of tax | 18 | -3 | 28 | -18 |
| Comprehensive income | $1,192 | $937 | $1,683 | $1,866 |
### CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| $ in millions, except par value | June 30, 2025 | December 31, 2024 |
|---|---|---|
| Assets | ||
| Cash and cash equivalents | $1,899 | $4,353 |
| Accounts receivable, net | 2,196 | 1,272 |
| Unbilled receivables, net | 7,133 | 5,908 |
| Inventoried costs, net | 1,553 | 1,455 |
| Prepaid expenses and other current assets | 1,245 | 1,286 |
| Total current assets | 14,026 | 14,274 |
| Property, plant and equipment, net of accumulated depreciation of $9,207 for 2025 and $8,733 for 2024 | 10,537 | 10,536 |
| Operating lease right-of-use assets | 1,783 | 1,770 |
| Goodwill | 17,435 | 17,512 |
| Intangible assets, net | 231 | 254 |
| Deferred tax assets | 1,713 | 1,599 |
| Pension and other postretirement benefit plan assets | 2,393 | 2,184 |
| Other non-current assets | 1,333 | 1,230 |
| Total assets | $49,451 | $49,359 |
| Liabilities | ||
| Trade accounts payable | $2,592 | $2,599 |
| Accrued employee compensation | 1,856 | 2,271 |
| Advance payments and billings in excess of costs incurred | 3,997 | 4,070 |
| Other current liabilities | 5,014 | 5,188 |
| Total current liabilities | 13,459 | 14,128 |
| Long-term debt, net of current portion of $551 for 2025 and $1,582 for 2024 | 15,160 | 14,692 |
| Pension and other postretirement benefit plan liabilities | 1,108 | 1,120 |
| Operating lease liabilities | 1,805 | 1,798 |
| Other non-current liabilities | 2,448 | 2,331 |
| Total liabilities | 33,980 | 34,069 |
| Shareholders’ equity | ||
| Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued and outstanding | — | — |
| Common stock, $1 par value; 800,000,000 shares authorized; issued and outstanding: 2025—143,276,021 and 2024—144,952,026 | 143 | 145 |
| Paid-in capital | — | — |
| Retained earnings | 15,452 | 15,297 |
| Accumulated other comprehensive loss | -124 | -152 |
| Total shareholders’ equity | 15,471 | 15,290 |
| Total liabilities and shareholders’ equity | $49,451 | $49,359 |
