Northrop Grumman Q2 2025: Mixed Results in a Tale of Four Segments

When a defense giant like Northrop Grumman (NOC) releases its quarterly earnings, it offers a glimpse into the health of the global security industry and the execution of massive, nation-critical projects. We're diving into their latest Form 10-Q, filed for the second quarter of 2025, to break down the numbers and see what's driving their performance.

Northrop Grumman's headline numbers show a company holding steady on revenue while posting a significant jump in profit. Sales for the quarter came in at $10.4 billion, a modest 1% increase from the same period last year. However, operating income surged an impressive 31% to $1.4 billion. But as with most financial stories, the devil is in the details.

To see how the company's revenue flows through its costs to generate profit, here's a visual breakdown of the income statement.

A significant portion of this quarter's profit boost came from a one-time event: a $231 million gain from the sale of a business. This is an important distinction because it's not from core operational improvements. When we strip out this gain, the operating performance looks more in line with the modest revenue growth. Net income landed at $1.2 billion, translating to diluted earnings per share of $8.15.

A Tale of Four Segments

The real story of Northrop's quarter unfolds when we look at its four distinct business divisions. The performance was a mixed bag, highlighting the benefits of a diversified portfolio.

• Mission and Defense Systems Shine: The stars of the quarter were Mission Systems (sensors, cyber, and C4ISR) and Defense Systems (weapons and munitions). Mission Systems saw a robust 14% jump in sales to $3.2 billion, while Defense Systems grew a solid 7% to $2.0 billion. These segments are clearly capitalizing on current defense priorities.
• Aeronautics Remains Steady: The Aeronautics Systems segment, home to high-profile programs like the B-21 Raider bomber, posted stable sales of $3.1 billion. In an industry defined by long-term projects, stability is a key measure of success.
• Space Systems Hits a Hurdle: The laggard this quarter was Space Systems, which saw sales decline 12% to $2.6 billion. While a single quarter doesn't define a trend, it's a notable dip for a segment that has been a major growth engine in recent years.

Looking Ahead

Northrop Grumman's Q2 2025 report paints a picture of a resilient, diversified company. While the headline profit numbers were flattered by an asset sale, strong growth in its Mission and Defense segments offset weakness in Space.

This performance underscores the dynamic nature of the defense industry. Success is not just about winning new contracts but about flawlessly executing existing ones and adapting to shifting geopolitical demands. For Northrop Grumman, navigating the challenges in its Space division while continuing to deliver in its other high-performing segments will be key to its future success.

For those who want to explore every detail, you can find the complete report on the SEC's website.