{"id":51397,"date":"2024-04-25T21:41:39","date_gmt":"2024-04-25T13:41:39","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/northrop-grumman-increases-space-sales-9-in-q1-reduces-backlog-for-canceled-classified-program\/"},"modified":"2024-04-25T21:41:39","modified_gmt":"2024-04-25T13:41:39","slug":"northrop-grumman-increases-space-sales-9-in-q1-reduces-backlog-for-canceled-classified-program","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/northrop-grumman-increases-space-sales-9-in-q1-reduces-backlog-for-canceled-classified-program\/","title":{"rendered":"Northrop Grumman Increases Space Sales 9% in Q1, Reduces Backlog for Canceled Classified Program"},"content":{"rendered":"<\/p>\n
\"Northrop
Northrop Grumman Building in Falls Church, Va. Photo: Northrop Grumman<\/figcaption><\/figure>\n<\/p>\n

Northrop Grumman<\/b>\u2019s Space segment posted $3.7 billion in sales in the first quarter of 2024, a 9% increase from the same period last year. Northrop Grumman reported Q1 financials on Thursday. <\/p>\n

Space posted the most revenue of the company\u2019s four segments, but Aeronautics posted the most growth, at 18% year-over-year. Company-wide, Northrop Grumman reported $10.1 billion in sales in Q1, a 9% increase over 2023. Sales increased in all four company segments. <\/p>\n

However, the Space backlog is down 10% from the end of 2023 after the U.S. Space Force canceled a multi-billion dollar classified Northrop Grumman satellite program. Northrop Grumman referred to the cancellation, which was reported in January 2024, as a \u201ctermination for convenience.\u201d <\/p>\n

CEO Kathy Warden told investors on Thursday there is little she can say about the program, \u201cexcept that the Air Force canceled that program largely due to budgetary concerns and prioritization. The requirement likely does still exist, and so we will see how that plays out over time,\u201d Warden said. <\/p>\n

The company reduced Space\u2019s unfunded backlog by $1.6 billion during the first quarter due to the termination. The Space Systems backlog now stands at $36.5 billion, with $9.4 billion funded, and $27 billion unfunded. <\/p>\n

Northrop Grumman reported the 9% increase in Space Sales was due to a $117 million increase on the Space Development Agency (SDA) Tranche 2 Transport Layer (T2TL) programs and higher volume on restricted programs, Commercial Resupply Services (CRS) missions, hypersonics programs and the Glide Phase Interceptor (GPI) program. <\/p>\n

The operating margin for Space decreased slightly \u2014 the company reported 9.1% operating margin in Q1, compared to 9.3% last year due to a benefit in 2023 from the sale of a license to a customer. <\/p>\n

Northrop Grumman slightly reduced 2024 guidance for the Space segment. In January, Northrop Grumman projected sales in the mid to high $14 billion range, and it now projects within the low to mid $14 billion range. This guidance reflects roughly 3% annual growth.<\/p>\n

CFO Dave Keffer commented on Thursday\u2019s call with investors: \u201cSales volume is now expected to trend lower over the remaining quarters of 2024 reflecting the NGI [Next Generation Interceptor] decision and the contract termination in restricted space that we noted last quarter. This is expected to be partially offset by continued growth in Sentinel and the SDA portfolio.\u201d<\/p>\n

Keffer referenced the Missile Defense Agency\u2019s recent decision to award Lockheed Martin the contract to develop a new interceptor in the NGI program. <\/p>\n

Keffer said that company-wide Northrop Grumman expects to have a book-to-bill ratio close to 1 for the year, with a higher ratio in Aeronautics, Defense, and Missions Systems, and a lower ratio for Space. A book-to-bill ratio is the ratio of orders received to units shipped and billed for a specified period.<\/p>\n

CEO Kathy Warden added that space will have the lowest book-to-bill ratio this year as Northrop Grumman digests the NGI loss and the program cancellation. <\/p>\n

\u201cBut our Space business has nearly doubled over the last four years, and the book-to-bill has been incredibly strong. So they\u2019re still carrying a large backlog of business that supports the growth rates that we\u2019re projecting for them,\u201d Warden said. <\/p>\n

In January, Warden spoke about remaining profitable when competing for SDA fixed-price contracts. She said the company had bid a \u201cfair and reasonable\u201d price on one of SDA\u2019s recent satellite competitions but the agency discontinued negotiations with the company. <\/p>\n

On Thursday, she again emphasized a commitment to profitability on fixed-price programs.<\/p>\n

\u201cWe see a variety of opportunities that we can pursue [in the space portfolio]. We\u2019re simply selective on which ones we\u2019re best positioned to win,\u201d Warden said. \u201cWith the SDA, we\u2019ve been quite successful and those programs are profitable. But that\u2019s because we\u2019re remaining disciplined in choosing where we can best compete and win with a reasonable fee and the probability of success.\u201d<\/p>\n

\u201cWe don\u2019t bid when we don\u2019t feel like we have a differentiated value that\u2019s going to be successful with the price we need to bid to both win and execute,\u201d she added. \u201cIt\u2019s really a decision we make on every capture. It\u2019s fundamental to the way we both commit and execute as well as deliver the returns that we expect.\u201d <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Northrop Grumman Building in Falls Church, Va. Photo: Northrop Grumman Northrop Grumman\u2019s Space segment posted $3.7 billion in sales in the first quarter of 2024, a 9% increase from the same period last year. Northrop Grumman reported Q1 financials on Thursday.  Space posted the most revenue of the company\u2019s four segments, but Aeronautics posted the […]<\/p>\n","protected":false},"author":1,"featured_media":51398,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-51397","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/51397"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=51397"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/51397\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/51398"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=51397"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=51397"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=51397"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}