Northrop Grumman Earnings Preview: Analysts Revise Forecasts Ahead of Q2 Report

Northrop Grumman is set to release Q2 earnings on July 22. Analysts expect the company to report a $6.68 EPS, up from $6.36 in the year-ago period, and revenue of $10.15 billion, down from $10.22 billion. Deutsche Bank downgraded the stock from Buy to Hold, while Wells Fargo, RBC Capital, Truist Securities, and Susquehanna maintained their ratings.

Northrop Grumman (NYSE:NOC) is poised to release its second-quarter 2025 earnings on Tuesday, July 22. Analysts are expecting the company to report an earnings per share (EPS) of $6.68, an increase from $6.36 in the year-ago period. Revenue is projected to decline to $10.15 billion from $10.22 billion in the same period last year. Deutsche Bank downgraded the stock from Buy to Hold, while Wells Fargo, RBC Capital, Truist Securities, and Susquehanna maintained their ratings [1].

The aerospace and defense sector has shown mixed results in recent quarters. While some companies like AAR Corporation reported strong revenue growth, Northrop Grumman has faced challenges, including missing revenue estimates four times over the last two years. Despite these setbacks, Northrop Grumman's stock has seen a 3.9% increase over the past month, heading into earnings with an average analyst price target of $553.19 [2].

Analysts are closely monitoring Northrop Grumman's key segments. The 'Sales - Mission Systems' segment is expected to increase by 4.8% year over year, while the 'Sales - Aeronautics Systems' segment is projected to grow by 6.4%. However, the 'Sales - Space Systems' segment is expected to decline by 24.3%, which could pose a significant risk to the company's overall performance. The 'Sales - Defense Systems' segment is projected to increase by 23%, providing a potential offset to the space segment's decline [2].

Northrop Grumman's operating income for the 'Defense Systems' segment is expected to decrease, while the 'Mission Systems' segment is projected to increase. The 'Space Systems' segment's operating income is expected to decline, reflecting the challenges faced in this area. Despite these challenges, the company's robust portfolio in the defense sector and operational efficiencies are expected to drive growth [2].

The financial health of Northrop Grumman shows mixed signals, with higher projected EPS amidst lower revenue expectations. The reduction in full-year earnings guidance introduces a cautious tone. However, the potential for earnings growth in Q2 2025 presents a bullish outlook. Key growth catalysts include Northrop Grumman's strategic positioning in the defense sector and operational efficiencies, while risks pertain to revenue pressures. Overall, the company's ability to meet or exceed EPS expectations will be crucial for sustaining investor confidence [2].

References:
[1] https://finance.yahoo.com/news/northrop-grumman-earnings-look-noc-030809643.html
[2] https://www.ainvest.com/news/northrop-grumman-noc-q2-2025-earnings-preview-upside-potential-eps-growth-expectations-2507/