Northrop Grumman (NOC) Q3 2025 Financial Results Summary
Release Date: October 21, 2025
Northrop Grumman Corporation (NYSE: NOC) reported strong financial results for the third quarter of 2025, highlighting growth across several key metrics. Below is a summary of the key financial results and insights from the earnings report.
Key Financial Highlights
- Net Awards: $12.2 billion, resulting in a book-to-bill ratio of 1.17.
- Sales: Increased by 4% to $10.4 billion from $10.0 billion in Q3 2024.
- Organic Sales: Grew by 5% to $10.4 billion.
- Operating Margin Rate: Improved to 11.9%, up from 11.2% a year ago.
- Segment Operating Margin Rate: Increased to 12.3% from 11.5%.
- Diluted Earnings Per Share (EPS): Increased by 10% to $7.67 compared to $7.00 in Q3 2024.
- 2025 MTM-Adjusted EPS Guidance: Raised by $0.65 to a range of $25.65 to $26.05.
Consolidated Operating Results
Total Sales Breakdown (Q3 2025 vs. Q3 2024)
- Aeronautics Systems:
- Sales: $3.142 billion (up 6%)
- Operating Income: $305 million (down 1%)
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Operating Margin Rate: 9.7% (down from 10.4%)
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Defense Systems:
- Sales: $2.059 billion (up 14%)
- Operating Income: $234 million (up 46%)
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Operating Margin Rate: 11.4% (up from 8.9%)
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Mission Systems:
- Sales: $3.093 billion (up 10%)
- Operating Income: $515 million (up 32%)
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Operating Margin Rate: 16.7% (up from 13.8%)
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Space Systems:
- Sales: $2.698 billion (down 6%)
- Operating Income: $298 million (down 14%)
- Operating Margin Rate: 11.0% (down from 12.0%)
Cash Flow Highlights
- Net Cash Provided by Operating Activities: Increased 43% to $1.557 billion compared to $1.091 billion in Q3 2024.
- Free Cash Flow: Rose 72% to $1.256 billion from $730 million in Q3 2024.
- Capital Expenditures: Decreased by 17% to $301 million compared to $361 million.
Financial Position
- Total Assets: $49.3 billion, slightly down from $49.4 billion as of December 31, 2024.
- Total Liabilities: Decrease to $33.3 billion from $34.1 billion.
- Shareholders’ Equity: Increased to $16.0 billion from $15.3 billion.
Share Repurchase and Dividends
- Common Stock Repurchases: Totaled $1.168 billion for the quarter.
- Dividends Paid: Amounted to $964 million.
Awards and Backlog
- Backlog Total: Stands at $91.4 billion.
- Major New Awards: Included significant contracts valued at $4.5 billion for restricted programs, $1.8 billion for the Ground-Based Midcourse Defense Weapon System, and additional contracts for F-35 and Virginia Class submarines.
Guidance for 2025
- Sales Guidance: Expected sales range of $41.7 billion to $41.9 billion (previously $42.05 billion to $42.25 billion).
- Segment Operating Income Guidance: Projected range of $4.275 billion to $4.375 billion.
- Free Cash Flow Guidance: Anticipates between $3.050 billion to $3.350 billion.
This summary encapsulates Northrop Grumman’s robust performance in the third quarter of 2025, showcasing a solid increase in sales, operating income, and overall financial strength while also emphasizing its ongoing commitment to returning value to shareholders through dividends and share repurchases.
| $ in millions, except per share amounts | Three Months Ended September 30 | 2025 | 2024 | Nine Months Ended September 30 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Sales | Product | $8,369 | $7,939 | $24,148 | $24,117 | |
| Service | 2,054 | 2,057 | 6,094 | 6,230 | ||
| Total sales | 10,423 | 9,996 | 30,242 | 30,347 | ||
| Operating costs and expenses | Product | 6,631 | 6,280 | 19,523 | 19,079 | |
| Service | 1,565 | 1,610 | 4,702 | 4,838 | ||
| General and administrative expenses | 985 | 986 | 3,008 | 3,149 | ||
| Total operating costs and expenses | 9,181 | 8,876 | 27,233 | 27,066 | ||
| Gain on sale of business | — | — | 231 | — | ||
| Operating income | 1,242 | 1,120 | 3,240 | 3,281 | ||
| Other (expense) income | Interest expense | -161 | -161 | -490 | -461 | |
| Non-operating FAS pension benefit | 136 | 168 | 403 | 503 | ||
| Other, net | 106 | 61 | 175 | 142 | ||
| Earnings before income taxes | 1,323 | 1,188 | 3,328 | 3,465 | ||
| Federal and foreign income tax expense | 223 | 162 | 573 | 555 | ||
| Net earnings | $1,100 | $1,026 | $2,755 | $2,910 | ||
| Basic earnings per share | $7.69 | $7.02 | $19.16 | $19.73 | ||
| Weighted-average common shares outstanding, in millions | 143.1 | 146.2 | 143.8 | 147.5 | ||
| Diluted earnings per share | $7.67 | $7.00 | $19.12 | $19.69 | ||
| Weighted-average diluted shares outstanding, in millions | 143.5 | 146.5 | 144.1 | 147.8 | ||
| Net earnings (from above) | $1,100 | $1,026 | $2,755 | $2,910 | ||
| Other comprehensive income (loss), net of tax | Change in cumulative translation adjustment | 2 | 2 | 11 | 2 | |
| Change in other, net | -1 | 8 | 18 | -10 | ||
| Other comprehensive income (loss), net of tax | 1 | 10 | 29 | -8 | ||
| Comprehensive income | $1,101 | $1,036 | $2,784 | $2,902 |
| $ in millions | September 30, 2025 | December 31, 2024 | |
|---|---|---|---|
| Assets | Cash and cash equivalents | $1,957 | $4,353 |
| Accounts receivable, net | 1,983 | 1,272 | |
| Unbilled receivables, net | 7,030 | 5,908 | |
| Inventoried costs, net | 1,615 | 1,455 | |
| Prepaid expenses and other current assets | 1,520 | 1,286 | |
| Total current assets | 14,105 | 14,274 | |
| Property, plant and equipment, net of accumulated depreciation of $9,430 for 2025 and $8,733 for 2024 | 10,542 | 10,536 | |
| Operating lease right-of-use assets | 1,783 | 1,770 | |
| Goodwill | 17,436 | 17,512 | |
| Intangible assets, net | 220 | 254 | |
| Deferred tax assets | 1,255 | 1,599 | |
| Pension and other postretirement benefit plan assets | 2,501 | 2,184 | |
| Other non-current assets | 1,458 | 1,230 | |
| Total assets | $49,300 | $49,359 | |
| Liabilities | Trade accounts payable | $2,797 | $2,599 |
| Accrued employee compensation | 1,946 | 2,271 | |
| Advance payments and billings in excess of costs incurred | 3,562 | 4,070 | |
| Other current liabilities | 4,413 | 5,188 | |
| Total current liabilities | 12,718 | 14,128 | |
| Long-term debt, net of current portion of $533 for 2025 and $1,582 for 2024 | 15,162 | 14,692 | |
| Pension and other postretirement benefit plan liabilities | 1,100 | 1,120 | |
| Operating lease liabilities | 1,796 | 1,798 | |
| Other non-current liabilities | 2,536 | 2,331 | |
| Total liabilities | 33,312 | 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—142,790,278 and 2024—144,952,026 | 143 | 145 | |
| Paid-in capital | — | — | |
| Retained earnings | 15,968 | 15,297 | |
| Accumulated other comprehensive loss | -123 | -152 | |
| Total shareholders’ equity | 15,988 | 15,290 | |
| Total liabilities and shareholders’ equity | $49,300 | $49,359 |
