Company: NOC
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0001133421-25-000053
Chunk: 50

Company: NORTHROP GRUMMAN CORP /DE/
Filing Date: 2025-10-21
Form: 10-Q
Item: Part I, Item 1
Chunk 50
---
 Adjustments - We record changes in estimated contract earnings at completion (net EAC adjustments) using the cumulative catch-up method of accounting. Net EAC adjustments can have a significant effect on segment operating income and margin rate.

The aggregate favorable and unfavorable EAC adjustments are presented in the table below:

Three Months Ended September 30Nine Months Ended September 30$ in millions2025202420252024Favorable EAC adjustments$433 $369 $1,161 $1,091 Unfavorable EAC adjustments(352)(233)(1,054)(823)Net EAC adjustments$81 $136 $107 $268 

Net EAC adjustments by segment are presented in the table below:

Three Months Ended September 30Nine Months Ended September 30$ in millions2025202420252024Aeronautics Systems$(66)$48 $(225)$165 Defense Systems35 10 141 45 Mission Systems121 16 163 11 Space Systems(5)60 37 50 Eliminations(4)2 (9)(3)Net EAC adjustments$81 $136 $107 $268 

AERONAUTICS SYSTEMSThree Months Ended September 30%Nine Months Ended September 30%$ in millions20252024Change20252024ChangeSales$3,142 $2,961 6 %$9,070 $9,065 — %Operating income305 309 (1)%443 927 (52)%Operating margin rate9.7 %10.4 %4.9 %10.2 %

Sales

Current Quarter

Third quarter 2025 sales increased $181 million, or 6 percent, primarily due to a $110 million increase on the E-130J TACAMO (“TACAMO”) program as it ramps up and a $105 million increase on the F-35 program largely driven by materials volume, partially offset by a decrease on F/A-18 as production nears completion.

Year to Date

Year to date 2025 sales were comparable to the prior year period and reflect a $226 million increase on TACAMO as that program ramps and a $111 million increase on the F-35 program largely driven by materials volume, partially offset by lower sales on restricted programs, commercial aerostructures programs and on F/A-18 as production nears completion.

Operating Income 

Current Quarter