It’s a tale of two defense stocks today as Northrop raises full year targets and is up 8.4%. Meanwhile, Lockheed affirmed full year revenue and cash flow and shares are down 6.4%.
“The Northrop Grumman team delivered a strong second quarter, with increased sales and outstanding operating performance.”
– Kathy Warden
“We continue to see growing demand globally for our broad range of product offerings, which resulted in 18% international sales growth in the quarter.”
– Kathy Warden
“With confidence in our team and our ability to deliver for our customers, we are increasing our full-year guidance for segment operating income, EPS and free cash flow.”
– Kathy Warden
Live coverage has ended. The full story is below.
Northrop Grumman (NYSE: NOC | NOC Price Prediction) reported this morning and investors like what they see.
In premarket trading, shares are up a little more than 3%. Let’s take a closer look at why this defense contractor should see strong share gains the day after reporting Q2 earnings.
Northrop Grumman Corporation reported its financial results for the second quarter of 2025, showing a 1% increase in sales to $10.4 billion compared to the same quarter in 2024. The company achieved a diluted EPS of $8.15, which includes a $1.04 benefit from the divestiture of its training services business.
Net earnings rose to $1.2 billion, reflecting a 25% increase year-over-year. The company’s operating margin improved to 13.8% from 10.7%, driven by a $335 million increase in operating income. Northrop also raised its full-year guidance for key financial metrics, including segment operating income and free cash flow.
CEO Kathy Warden expressed confidence in the company’s performance, citing strong demand for its products and an 18% growth in international sales. Despite these positive results, free cash flow decreased by 42% due to higher net cash taxes. Northrop Grumman returned over $700 million to shareholders through share repurchases and dividends during the quarter.
We bolded the area to watch above, which is Northrop raising their guide for 2025. That’s important, because in their last quarter Northrop had actually cut their 2025 guidance. The company now expects to earn $25 to $25.40 this year.
It’s not all good news, however.
One example that Wall Street won’t like is the company guiding toward $42.05 billion to $42.25 billion in sales, which at the midpoint is lower than previous guidance.
Still, with the company raising profit targets, Wall Street is cheering these earnings.
Contact [email protected] for any questions or corrections.
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
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