Stock Analysis on Net
Stock Analysis on Net

Northrop Grumman Corp. (NYSE:NOC)

This company has been moved to the archive! The financial data has not been updated since April 27, 2023.

Common-Size Income Statement

Northrop Grumman Corp., common-size consolidated income statement

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12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Product 77.92 78.13 73.41 70.48 68.01
Service 22.08 21.87 26.59 29.52 31.99
Sales 100.00% 100.00% 100.00% 100.00% 100.00%
Product -62.19 -62.55 -58.59 -55.18 -52.45
Service -17.40 -17.07 -21.09 -23.37 -24.98
Cost of sales -79.58% -79.62% -79.68% -78.55% -77.43%
Gross profit 20.42% 20.38% 20.32% 21.45% 22.57%
General and administrative expenses -10.58 -10.08 -9.27 -9.72 -10.00
Gain on sale of business 0.00 5.55 0.00 0.00 0.00
Operating income 9.84% 15.84% 11.05% 11.73% 12.56%
Interest expense -1.38 -1.56 -1.61 -1.56 -1.87
Non-operating FAS pension benefit 4.11 4.12 3.26 2.36 3.49
Mark-to-market pension and OPB benefit (expense) 3.37 6.60 -2.81 -5.32 -2.18
Other, net 0.01 0.05 0.25 0.32 0.43
Other income (expense) 6.11% 9.22% -0.92% -4.20% -0.13%
Earnings before income taxes 15.94% 25.06% 10.13% 7.53% 12.43%
Federal and foreign income tax expense -2.57 -5.42 -1.46 -0.89 -1.70
Net earnings 13.38% 19.64% 8.67% 6.64% 10.73%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial performance from 2018 to 2022 is characterized by a strategic shift in revenue composition and fluctuations in profitability driven by both operational changes and significant non-operating items.

Revenue Composition
A consistent shift in the revenue mix is observed, with product sales increasing from 68.01% of total sales in 2018 to 77.92% in 2022. This growth in product-based revenue is mirrored by a corresponding decline in service-based revenue, which decreased from 31.99% to 22.08% over the same five-year period.
Gross Profitability and Cost Structure
The cost of sales remained relatively stable, moving from 77.43% of sales in 2018 to 79.58% in 2022. This marginal increase in costs led to a gradual compression of the gross profit margin, which declined from 22.57% in 2018 to 20.42% in 2022, showing a period of stabilization between 2020 and 2022.
Operating Performance
General and administrative expenses remained consistent, fluctuating within a narrow range between 9.27% and 10.58% of sales. Operating income margins exhibited volatility; a peak of 15.84% was recorded in 2021, largely attributed to a one-time gain on the sale of a business representing 5.55% of sales. Excluding this extraordinary item, a downward trend in core operating margins is evident, ending at 9.84% in 2022.
Non-Operating Impact and Net Earnings
Net earnings were heavily influenced by non-operating volatility, particularly pension-related adjustments and one-time gains. Net earnings peaked at 19.64% of sales in 2021, driven by the aforementioned business sale and a significant mark-to-market pension benefit of 6.60%. While net earnings settled at 13.38% in 2022, this remained higher than the 2018-2020 average, supported by a continued positive contribution from non-operating pension benefits and a reduction in interest expense from 1.87% to 1.38% of sales.

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