Revenue Analysis:
Total and Operating Revenue: NOC’s total revenue showed a varying trend across the periods. It peaked in Q4 2024 at $10.133 billion, with a minor drop in Q3 2023 to $9.775 billion after recording $10.638 billion in Q4 2023.
Gross Profit: Gross profit followed a consistent upward trend, peaking at $2.133 billion in Q4 2024, compared to $2.041 billion in Q3 2023 and $0.485 billion in Q4 2023 reflecting improved cost management or increased sales efficiency.
Cost Management:
Cost of Revenue: The cost of revenue was highest in Q4 2023 at $10.153 billion, reducing significantly to $7.734 billion by Q3 2023, and slightly increasing to $8 billion in Q4 2024.
Operating Expense: Operating expenses were closely aligned with revenues but showed significant variability, with the highest being $1.073 billion in Q3 2023 and the lowest at $0.878 billion in Q4 2023.
Total Expenses: Fluctuating in line with revenues and cost of goods sold, total expenses hit a high in Q4 2023 at $11.031 billion and were lowest in Q3 2023 at $8.759 billion.
Profitability Analysis:
EBITDA: EBITDA stood out in Q4 2024 at $1.576 billion, bouncing back from a negative $229 million in Q4 2023. This dramatic recovery suggests significant operational improvements or one-off factors impacting earlier periods.
Operating Income: Operating income was negative in Q4 2023 at -$393 million but recovered impressively to $1.239 billion by Q4 2024.
Pretax Income: Following a loss of $757 million in Q4 2023, pretax income recovered to $1.131 billion by Q3 2023 and reached $1.113 billion in Q4 2024.
Net Income: Net income was deeply negative at -$535 million in Q4 2023, but by Q4 2024, it had recovered to a robust $944 million.
Cash Flow Indicators:
Reconciled Depreciation: Depreciation expenses remained relatively stable, ranging from $299 million in Q4 2024 to $400 million in Q4 2023.
Interest Expense: Interest expense was consistent across all periods, showing minor fluctuations around $140 million to $146 million.
Taxation:
Tax Rate: The effective tax rate varied significantly, from 16.5% in Q4 2024 to a high of approximately 29.3% in Q1 2024.
Tax Provision: The tax provision mirrored pre-tax profits and losses, with a low of -$222 million in Q4 2023 and recovering to $187 million in Q4 2024.
Tax Effect of Unusual Items: There were no unusual tax items noted in any of the periods indicating stable tax conditions.
Shareholder Metrics:
Diluted and Basic EPS: Earnings per share (EPS) fluctuated, with the lowest at Q4 2023 and recovering to $6.32 (diluted) and $6.34 (basic) in Q4 2024.
Average Shares: There was a slight decrease in the number of shares outstanding from 151.7 million in Q3 2023 to 149.3 million by Q4 2024, indicating potential share buybacks or adjustments.
Net Income Available to Common Stockholders: This followed the net income trend, recovering from a loss in Q4 2023 to a strong positive by Q4 2024.
Conclusion:
NOC has demonstrated a recovery from a challenging Q4 2023 with substantial improvements in profitability, efficient cost management, and strong revenue growth towards Q4 2024. However, the variability observed suggests potential volatility that stakeholders should monitor closely.