Northrop Grumman sees opportunity as European defence budgets grow

A computer image of a Northrop Grumman LGM-35A Sentinel ICBM. (Northrop Grumman)

Northrop Grumman is positioned for continued growth in the coming years, Kathy Warden, CEO and president of Northrop Grumman, said at Bernstein's Annual Strategic Decisions Conference on 30 May. The company continues to invest for growth while increasing dividends for shareholders another 10% and identifying USD2 billion in share repurchases, she said.

The company's diverse portfolio, covering space, armaments, integrated air and missile defence (IAMD), mission systems, and microelectronics, has seen strong organic growth, which Warden said was expected to be sustained into the future.

Over the last year, Northrop Grumman has seen strong global demand, with Europe specifically seen as a market that is likely to sustain demand over the long term, Warden said. She highlighted the products that the company has rolled out over the last three years that can serve the European market, including the MQ-4C Triton unmanned aircraft system (UAS), IAMD systems, IAMD Battle Command System (IBCS), and additional tactical missile and armaments capabilities.

On the US side, Warden said there were no surprises in the fiscal year (FY) 2025 defence budget request. There is more pressure on the base budget due to the Fiscal Responsibility Act (FRA), which caps spending, but Congress may still pass supplemental budgets. There are strong demand signals from the US for modernisation and dealing with the effects of inflation, she said.

The economic picture is also improving as supply chain and labour issues start to subside. Warden said the company has been able to fully staff its programmes and is ready to meet demand.