Northrop Grumman has reported a 3% increase in its sales in 2022 to $36.6bn, compared with $35.7bn recorded the previous year.
The increase has been attributed to a sales increase of $1.7bn, or 16% at Space Systems and Mission Systems, which was partly offset by $728m; or a 6% sales decrease at Aeronautics Systems, and $197m, or a 3% drop at Defence Systems.
In 2022, net earnings were $4.9bn, or $31.47 per diluted share (EPS), and transaction-adjusted net earnings were $4bn, or an EPS of $25.54.
The company noted that the 2022 net earnings reflect a mark-to-market (MTM) benefit of $922m, after tax.
Operating income fell $2.1bn, or 36% in 2022, due to a $2bn pre-tax gain on sale, $192m of unallocated corporate expenses, and a $330m reduction in the Financial Accounting Standards/Cost Accounting Standards (FAS/CAS) operating adjustment.
The operating margin rate in the year also dropped from 15.8% to 9.8%.
During the fourth quarter, the company’s sales were up 16% to $10bn, which reflects a strong demand, labour availability trends improvement, and material receipts timing.
Net earnings for the quarter were $2.1bn and transaction-adjusted net earnings were $1.2bn, or $7.50 diluted EPS.
The company recorded fourth quarter and year to date 2022 net awards of $9.1bn and $39.3bn, respectively, and a backlog of $78.7bn.
Earlier this month, the company began production for the US Army’s Guided Multiple Launch Rocket System (GMLRS) rocket motor.
Northrop Grumman chair, chief executive officer and president Kathy Warden said: “The Northrop Grumman team continues to deliver strong financial and operating performance, further positioning our company for near and long-term growth. We’re providing differentiated solutions for our customers’ highest priority missions, driving a strong global demand signal for our products and maintaining a healthy backlog.”
The company expects 2023 sales to be in the range of $38bn to $38.4bn.
Warden added: “Given our proven ability to competitively win, hire, and perform, we’re raising our sales outlook for 2023 and expect to deliver strong multi-year cash flow growth. We are focused on executing our strategy, investing in the capabilities and capacity our customers need, and returning a significant portion of our growing cash flows to our shareholders.”