Stock Analysis on Net
Stock Analysis on Net

Northrop Grumman Corp. (NYSE:NOC)

$22.49

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

Common-Size Income Statement
Quarterly Data

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Northrop Grumman Corp., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Product
Service
Sales
Product
Service
Cost of sales
Gross profit
General and administrative expenses
Gain on sale of business
Operating income
Interest expense
Non-operating FAS pension benefit
Mark-to-market pension and OPB benefit (expense)
Other, net
Other income (expense)
Earnings before income taxes
Federal and foreign income tax expense
Net earnings

Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

Sales Composition Trends
The proportion of sales attributed to products has been steadily increasing over the observed periods, rising from approximately 63.68% in early 2018 to around 78.17% by Q1 2023. Conversely, the service segment's share of sales has consistently decreased, dropping from 36.32% to roughly 21.83% during the same timeframe. This indicates a strategic or market-driven shift towards product sales dominance.
Cost of Sales and Gross Profit
Cost of sales as a percentage of total sales fluctuated but generally remained high, mostly staying within the 75% to 82% range, with occasional peaks (e.g., 82.05% in Q4 2021). Gross profit margins correspondingly exhibited volatility, ranging from about 17.95% to 24.6%, peaking in Q3 2018 and declining notably in late 2021. Despite fluctuations, gross profit maintained an overall positive margin, reflecting consistent profitability before operating expenses.
Operating Expenses and Income
General and administrative expenses generally accounted for approximately 9% to 11.5% of sales, with periodic variations but no clear upward or downward trend. Operating income fluctuated in tandem with gross profit, moving mostly between 8.59% and 14.5%, apart from an exceptional increase in Q1 2021 to 30.82% likely influenced by a non-recurring gain. The operating income pattern suggests operational profitability was affected by occasional irregular items.
Non-Operating Items and Other Income
Interest expense steadily decreased as a percentage of sales, dropping from just above 2% in early 2018 down to approximately 1.39% by Q1 2023, reflecting improved debt cost management or reduced borrowing. The non-operating pension benefits generally showed positive contributions fluctuating around 2% to 4%, with a notable decline to 1.42% at the end of the series. Significant volatility appeared in mark-to-market pension and other postretirement benefit (OPB) expenses, including large negative impacts (e.g., -20.64% in Q1 2020) and positive one-offs (e.g., 27.26% in Q1 2021), indicating sensitivity to actuarial or market adjustments.
Tax and Net Earnings Trends
Federal and foreign income tax expense as a percentage of sales exhibited irregular patterns, sometimes positive and sometimes negative, indicating unusual tax events or adjustments. Net earnings margins mirrored operating income trends, typically ranging between 9% and 15%, but with notable spikes and dips influenced by non-recurring items and tax fluctuations. The highest net earnings margin was recorded in Q1 2021 at nearly 24%, followed by substantial volatility including periods of low or negative net earnings margins.
Additional Observations
The data reveal intermittent occurrences of gains from extraordinary items, such as a sizable gain on sale of business recorded in Q1 2021, significantly impacting profitability metrics for that quarter. Overall, the financial performance shows resilience with consistent profitability but is punctuated by episodic significant fluctuations related to non-operating factors and tax effects. The shifting sales mix towards products suggests strategic alignment or market demand favoring product offerings over services.