Northrop Grumman (NOC) has reported a 5.99 percent rise in profit for the year ended Dec. 31, 2014. The company has earned $2,069 million, or $9.75 a share in the year, compared with $1,952 million, or $8.35 a share for the last year. Revenue during the year went down marginally by 2.77 percent to $23,979 million from $24,661 million in the previous year. Gross margin for the year expanded 155 basis points over the previous year to 23.36 percent. Total expenses were 86.67 percent of annual revenues, down from 87.34 percent for the last year. This has led to an improvement of 66 basis points in operating margin to 13.33 percent.
Operating income for the year was $3,196 million, compared with $3,123 million in the previous year.
“Our team delivered another year of strong performance in 2014. We are excited about our many future opportunities and remain committed to generating value through sustainable performance, a well-aligned portfolio and effective cash deployment,” said Wes Bush, chairman, chief executive officer and president.
The company's 2015 financial guidance is based on the spending levels provided for in the Bipartisan Budget Act of 2013 and the Consolidated and Further Appropriations Act of 2015. The guidance assumes no disruption or cancellation of any of our significant programs and no disruption or shutdown of government operations resulting from a federal government debt ceiling breach. Guidance for 2015 also assumes adequate appropriations and funding for the company's programs in the first quarter of the U.S. government's fiscal year 2016.
Operating cash flow improves marginally
Northrop Grumman has generated cash of $2,593 million from operating activities during the year, up 4.43 percent or $110 million, when compared with the last year.
The company has spent $645 million cash to meet investing activities during the year as against cash outgo of $346 million in the last year.
The company has spent $3,235 million cash to carry out financing activities during the year as against cash outgo of $849 million in the last year period. It has spent net of $2,668 million on repurchase of common stocks.
Cash and cash equivalents stood at $3,863 million as on Dec. 31, 2014, down 24.99 percent or $1,287 million from $5,150 million on Dec. 31, 2013.
Working capital drops significantly
Northrop Grumman has witnessed a decline in the working capital over the last year. It stood at $2,292 million as at Dec. 31, 2014, down 37.60 percent or $1,381 million from $3,673 million on Dec. 31, 2013. Current ratio was at 1.39 as on Dec. 31, 2014, down from 1.63 on Dec. 31, 2013.
Cash conversion cycle (CCC) has increased to 35 days for the year from 33 days for the last year. Days sales outstanding went up to 46 days for the year compared with 42 days for the same period last year.
Days inventory outstanding was almost stable at 14 days for the year, when compared with the last year period. At the same time, days payable outstanding went up to 25 days for the year from 23 for the same period last year.
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