Northrop Grumman (NOC) Financials

Northrop Grumman (NYSE: NOC) has demonstrated a generally positive financial trajectory over the past several quarters based on the analyzed data from income statements, balance sheets, and cash flow statements across the last four years.

Income Statement Highlights:

• Net income increased strongly from a loss of -$535 million in Q4 2023 to a profit of $1.17 billion in Q2 2025, indicating a significant recovery and growth in profitability.
• Operating revenue rose from about $9.3 billion in Q1 2023 to over $10.35 billion in Q2 2025, showing consistent top-line growth.
• Diluted earnings per share improved from a low of -$3.49 in Q4 2023 to $8.15 in Q2 2025, reflecting improved earnings quality and shareholder value.
• Northrop maintained and slightly increased cash dividends per share from $1.73 in early 2023 to $2.31 in Q2 2025, suggesting growing confidence in cash flows and returns to investors.
• Gross profit margins have improved, with gross profit rising alongside revenue, indicating effective cost management.
• Interest expense has fluctuated but remained within a manageable range (~$120-$173 million per quarter), which should not materially impair earnings moving forward.

Balance Sheet Highlights:

• Total assets increased from about $44.2 billion in Q1 2023 to approximately $49.5 billion in Q2 2025, suggesting expansion and investment in the business.
• Retained earnings grew steadily, from around $15.1 billion in Q1 2023 to $15.45 billion in Q2 2025, supporting strengthening equity base.
• Long-term debt has moderately increased, from about $13.77 billion at the beginning of 2023 to $15.16 billion in Q2 2025, but remains balanced against stronger equity and asset growth.
• Cash and equivalents showed an overall increase, particularly rising to about $1.9 billion by Q2 2025, providing liquidity cushion.

Cash Flow Statement Highlights:

• Net cash from operating activities turned from negative flows (-$706 million in Q1 2023) to strong positive flows ($868 million in Q2 2025), indicating improving operational cash generation.
• Investing activities consistently reflect property and equipment purchases in the $200-$800 million range quarterly, showing ongoing investment but manageable capital expenditure levels.
• Net cash used in financing activities is substantial (e.g., -$715 million in Q2 2025), mainly from debt repayments, common equity repurchases, and dividend payments, which reduce cash balances but indicate capital return to shareholders.
• Despite financing outflows, the company achieved a $214 million net increase in cash and equivalents in Q2 2025, evidencing prudent cash management coupled with operational strength.

Key Takeaways:

• Northrop Grumman has successfully improved profitability and operational cash flow beginning 2024 and into 2025 following a challenging period with losses in late 2023.
• The company’s balance sheet remains solid, with growing equity, increased retained earnings, and prudent levels of debt relative to assets.
• Increasing dividends and share repurchases point to management’s confidence in future cash flows and shareholder value creation.
• Capital expenditures remain steady, supporting business operations and future growth, without excessive strain on cash.
• High cash outflows for financing activities, mainly repurchases and dividends, may reduce cash reserves, though current cash and operational cash flow levels mitigate this risk.

Overall, Northrop Grumman’s financials over the last four years reveal a company recovering well from past losses, improving earnings and cash flow, investing in its operations, and returning value to shareholders. Retail investors may view this as a positive outlook, balanced with monitoring the ongoing use of cash in financing activities.