Northrop Grumman’s rendering of the Tranche 2 Transport Layer. Photo: Northrop Grumman

Earnings for Northrop Grumman’s Space segment were up 14% year-over-year in the third quarter of 2023, despite a modest decline in sales.

Northrop Grumman reported Q3 results on Thursday. The Space Systems segment reported $2.9 billion in sales in the third quarter, down 3% compared to the same time last year. 

CFO Dave Keffer told investors that the decline in sales was in line with expectations. Part of the decline was due to winding down a canceled classified Space Force satellite program, and the Next-Generation Interceptor (NGI) award going to Lockheed Martin. 

Keffer commented that the remaining space portfolio grew at mid-single digits, driven by higher sales on Space Development Agency (SDA) satellite programs and other restricted work.

Despite the dip in sales, the segment’s operating income sharply increased — up 14% year-over-year to $345 million. Space delivered the largest amount operating income growth among the company’s four segments. Space operating margin during the quarter was 12%.  

CEO Kathy Warden told investors that Space performance was “excellent” during the quarter. “Strong program performance was the key driver as the team executed well, mitigating risks and realizing opportunities, leading to improved EAC [estimate at completion] trends in recent quarters,” Warden said. 

Space revenue guidance remained the same for 2024, with sales in the mid to high $11 billion range. Operating margin guidance increased slightly from the low 10% to high 10%. 

Company-wide, Northrop Grumman reported sales of $10 billion, up 2% year-over-year, with increases in Aeronautics Systems, Defense Systems, and Mission Systems.