Northrop Grumman’s 2021 revenue showed a $1-billion bump from the ramp-up of the Ground Based Strategic Deterrent nuclear-tipped, intercontinental ballistic missile program, the company reported this week in its latest annual 10-K filing with the Securities and Exchange Commission.
On the whole, the sale of the company’s IT business in February depressed sales and earnings, and while the market did slap Northrop this week for failing to beat the street — shares dropped by about $30 each this week — the stock price on Friday was still up $80 compared with a year ago.
Book-kept in the company’s Mission Systems segment, the Ground Based Strategic Deterrent (GBSD) work helped keep segment sales about flat compared with 2020, after the company sold its IT services division to private equity in February for just under $3.5 billion.
Mission Systems had just over $10 billion in sales for 2021, or $54 million more than in 2020, Northrop wrote in its latest earnings filing. Segment operating income, however, was up some 8% to more than $1.5 billion from about $1.45 billion in 2020.
The Air Force in 2020 awarded Northrop a nine-year GBSD engineering and manufacturing development contract worth about $13 billion, under which the company will produce the first of more than 660 planned missiles. GBSD will replace existing Boeing-built Minuteman III missiles starting in 2030 or so. The first GBSD flight test with a mockup W87-0 warhead, provided by the Lawrence Livermore National Laboratory, was on the slate for December 2030, the Air Force has said. GBSD will cost more than $250 billion over its decades-long deployment, the service has said.
Overall, divesting itself of the IT business drove a broader slowdown in sales for the contracting mega-giant in 2021, when net income fell 14% year-over-year to $948 million, $6 a share, from $1.1 billion, or $6.59 a share, last year. A $73 million charge related to the F-35 program, which has felt some labor disruptions from COVID-19, also figured into the mix, the company said.
