Northrop Grumman Corporation (NOC) stock dropped over 5% today after the defense contractor announced financial results for the fourth quarter of 2021.
The company reported fourth quarter 2021 sales of $8.6 billion, a decrease of 10% from the prior year period.
2021 transaction adjusted net earnings were $4.1 billion, or $25.63 per diluted share.
The firm's segments include aeronautics, mission systems, defense services, and space systems.
Supply Chain Challenges
Northrop revealed that sector operations were significantly affected by COVID-19 and the broader economic environment, which included a tight labor market, elevated levels of employee leave, and supply chain challenges.
Kathy Warden, chairman, CEO and president of Northrop, commented, “Northrop Grumman delivered another year of solid results in 2021, exceeding our initial outlook for sales and earnings."
"Our team continued to perform for our customers and shareholders in the midst of the COVID environment."
The company also recorded the sale of its IT services business in 2021.
While this move caused fourth quarter sales to decline by $583 million (15%), it led to increased transaction-adjusted EPS of 8%.
Looking Ahead
Northrop management believes the company is set for a strong upcoming year.
Warden commented, “Looking forward, our business remains well aligned to growing global defense budgets, and with a robust backlog and new competitive wins, we expect continued sales growth."
Fourth quarter and full year 2021 net awards totaled $9.8 billion and $32.1 billion, respectively, and backlog totaled $76 billion.
Significant fourth quarter awards include a $3.2 billion for the SLS Booster Production and Operations Contract, $1.5 billion for restricted programs (primarily at Mission Systems), $0.6 billion for F-35 at Mission Systems, $0.4 billion for E-2, and $0.3 billion for the Global Hawk program
