Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Northrop Grumman Corp., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Product	28,522)	27,868)	27,015)	23,852)	20,469)
Service	8,080)	7,799)	9,784)	9,989)	9,626)
Sales	36,602)	35,667)	36,799)	33,841)	30,095)
Product	(22,761)	(22,309)	(21,559)	(18,675)	(15,785)
Service	(6,367)	(6,090)	(7,762)	(7,907)	(7,519)
Cost of sales	(29,128)	(28,399)	(29,321)	(26,582)	(23,304)
Gross profit	7,474)	7,268)	7,478)	7,259)	6,791)
General and administrative expenses	(3,873)	(3,597)	(3,413)	(3,290)	(3,011)
Gain on sale of business	—)	1,980)	—)	—)	—)
Operating income	3,601)	5,651)	4,065)	3,969)	3,780)
Interest expense	(506)	(556)	(593)	(528)	(562)
Non-operating FAS pension benefit	1,505)	1,469)	1,198)	800)	1,049)
Mark-to-market pension and OPB benefit (expense)	1,232)	2,355)	(1,034)	(1,800)	(655)
Other, net	4)	19)	92)	107)	130)
Other income (expense)	2,235)	3,287)	(337)	(1,421)	(38)
Earnings before income taxes	5,836)	8,938)	3,728)	2,548)	3,742)
Federal and foreign income tax expense	(940)	(1,933)	(539)	(300)	(513)
Net earnings	4,896)	7,005)	3,189)	2,248)	3,229)

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).

Revenue demonstrated a general upward trajectory from 2018 to 2022, increasing from 30,095 million US dollars to 36,602 million US dollars. This growth was driven primarily by a consistent expansion in product sales, which rose from 20,469 million US dollars to 28,522 million US dollars over the five-year period. Conversely, service revenues experienced a decline, peaking in 2019 at 9,989 million US dollars before retreating to 8,080 million US dollars by 2022.

Gross Profitability and Operational Costs: Gross profit remained relatively stagnant, fluctuating between 6,791 million US dollars in 2018 and 7,474 million US dollars in 2022. This indicates that the increase in total sales was largely offset by a corresponding rise in the cost of sales. General and administrative expenses exhibited a steady year-over-year increase, growing from 3,011 million US dollars in 2018 to 3,873 million US dollars in 2022, placing downward pressure on operating margins.
Operating Income Trends: Operating income showed moderate stability between 2018 and 2020, before spiking to 5,651 million US dollars in 2021. This peak was significantly influenced by a one-time gain on the sale of a business amounting to 1,980 million US dollars. In 2022, operating income reverted to 3,601 million US dollars, the lowest level within the analyzed period, reflecting the absence of non-recurring gains and the impact of rising administrative costs.
Non-Operating Impacts and Net Earnings: Net earnings were characterized by high volatility, primarily driven by non-operating items. A substantial increase in net earnings was observed in 2021, reaching 7,005 million US dollars, fueled by both the business sale gain and a positive mark-to-market pension and OPB benefit of 2,355 million US dollars. In contrast, 2019 saw a dip in net earnings to 2,248 million US dollars, largely due to a mark-to-market pension expense of 1,800 million US dollars. By 2022, net earnings stabilized at 4,896 million US dollars, supported by continued pension benefits and a reduction in interest expenses.

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Northrop Grumman Corp. (NYSE:NOC)

Income Statement