Northrop Grumman Accelerates Share Buyback with $1B Agreement

Northrop Grumman (NYSE:NOC) experienced a 1.3% surge in post-market trading on Monday following its announcement of an accelerated share repurchase agreement with Morgan Stanley. The defense contractor intends to repurchase $1 billion of its common stock.

Northrop (NOC) disclosed its expectation of receiving approximately 1.8 million shares on January 31, representing roughly 80% of the buybacks under the repurchase deal, contingent upon the day’s closing price of $438.31.

The accelerated share repurchase (ASR) will be executed under the company’s current share repurchase authorization, which still has about $3.6 billion remaining.

In its statement, Northrop (NOC) also indicated that it anticipates the buybacks to be finalized no later than Q2. Moreover, the company articulated its commitment to returning “well over 100%” of its free cash flow to shareholders through dividends and buybacks for the current year.