Shares of Northrop Grumman (NYSE:NOC) rose more than 4% on Tuesday after the aerospace giant highlighted the rising demand for its national security-related products.
The B-21 Raider. Image source: Northrop Grumman.
Missed AI’s “Act 1”? Act 2 Could Be 14x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Arming America and its allies
Northrop’s sales grew 7% year over year to $11.1 billion in the third quarter. Growth was driven by a 14% jump in aeronautics systems revenue to $3.6 billion and a 12% rise in defense systems sales to $2.3 billion.
Sales related to the B-21 stealth bomber, F-35 strike fighter, and Sentinel missile contributed to Northrop’s gains.
All told, Northrop’s net earnings increased 2% to $1.1 billion, or $7.89 per share. That topped Wall Street’s expectations, which had called for per-share profits of $7.18.
Defense spending is set to rise
Conflicts in Ukraine and the Middle East are driving the U.S. military and its allies to invest more in defense-related technology.
Net awards of $16.4 billion in the third quarter brought Northrop’s order backlog to $109.6 billion.
The defense contractor, in turn, expects full-year net sales of $44 billion in 2026. Management also projects adjusted earnings per share of $29.35 to $29.75 and free cash flow of $3.1 billion to $3.5 billion.
“Globally, we continue to witness unprecedented levels of demand for defense capabilities,” CEO Kathy Warden said during a conference call with analysts.
Should you buy stock in Northrop Grumman right now?
Before you buy stock in Northrop Grumman, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Northrop Grumman wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $376,696!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,333,920!*
Now, it’s worth noting Stock Advisor’s total average return is 925% — a market-crushing outperformance compared to 212% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
