Northrop Grumman Reports Q2 2025 Financial Results with $10.35 Billion in Sales

Northrop Grumman Corporation reported its financial results for the second quarter of 2025, revealing total sales of $10.35 billion, a 1% increase from $10.22 billion in the same period last year. The company's operating income rose significantly by 31% to $1.43 billion, compared to $1.09 billion in the prior year. This increase was primarily attributed to a $231 million gain from the divestiture of its training services business, which was completed on May 24, 2025. Net earnings for the quarter reached $1.17 billion, or $8.15 per diluted share, marking a 25% increase from $940 million, or $6.36 per diluted share, in the previous year.

In terms of year-to-date performance, Northrop Grumman's total sales decreased by 3% to $19.82 billion from $20.35 billion in the first half of 2024. Operating income for the first six months of 2025 was $2.00 billion, down 8% from $2.16 billion in the same period last year. The decline in year-to-date sales was primarily driven by lower sales in the Space Systems segment, which experienced a significant wind-down of work on certain programs. The company also reported a decrease in net earnings for the first half of the year, totaling $1.66 billion compared to $1.88 billion in 2024.

Strategically, Northrop Grumman has undergone significant organizational changes, including the realignment of its Strategic Deterrent Systems division from Space Systems to Defense Systems, effective July 1, 2024. Additionally, the company realigned its Strike and Surveillance Aircraft Solutions business unit from Defense Systems to Aeronautics Systems, effective January 1, 2025. The divestiture of the training services business not only provided immediate cash inflow but also allowed the company to focus on its core defense and aerospace operations.

Operationally, Northrop Grumman's backlog as of June 30, 2025, stood at $89.7 billion, reflecting a decrease of $150 million due to the divestiture. The company expects to recognize approximately 40% of this backlog as revenue over the next 12 months. The second quarter saw new awards totaling $7.4 billion, with significant contributions from restricted programs and military ammunition programs. The company’s employee headcount remained stable, supporting its ongoing projects and operational needs.

Looking ahead, Northrop Grumman anticipates continued demand for its products and services, driven by the evolving global security environment and increased defense spending. The company is closely monitoring geopolitical developments, particularly in regions like Ukraine and the Pacific, which may influence future contracts and operational strategies. Despite challenges such as inflation and supply chain disruptions, Northrop Grumman remains committed to delivering value to its shareholders and customers while navigating the complexities of the defense industry.