Northrop Grumman Corp.

Northrop Grumman Corp. is well aligned with the national security strategy. The company’s strengths in strategic bombers, ICBMs, and unmanned aerial vehicles are critical capabilities as the US military focuses more on possible confrontation with major powers including China and Russia.

• Customer strength is greatest with the US Air Force and Space Forces. Alignment with the US Navy is not as strong as it once was, but still yields significant business.
• Northrop Grumman is positioned in the strong spending areas such as command, control, communications, computers, intelligence, surveillance, and reconnaissance. Better integration of the various businesses acquired in recent years promises to increase the number and size of programs that Northrop Grumman can pursue.
• The acquisition of Orbital ATK has further improved the company's positioning in growth areas such as space and ballistic missile defense.
• The company had total revenue of $35.7 billion in calendar year 2021, a 3% decline from the previous year. Over the past several years it has grown by 50%, starting in 2016 at $24.7 billion.
• While top line growth has been robust, getting enhanced profitability had lagged. Over this period, its Operating Margins did decline from 13.3% in 2016 to 11% in 2020, but then bounced up to 15.8% in 2021. Some of this can be attributed to the COVID pandemic. Management will focus on sustaining the recently achieved strength in operating margin.
• As of late October 2022, management estimated that full-year 2022 revenues would be approximately $36.4 billion, up nearly 2% from 2021. For the first nine months of 2022, the company had revenues of $26.5 billion, which was down slightly over the same period in 2021.