Northrop Grumman Corporation Earnings Recaps
Q2 2026
Jul 23, 2026
Northrop Grumman's shares were essentially unchanged, rising a modest 0.3% following Q2 earnings that featured solid bookings and backlog growth but were weighed down by margin pressure from two key programs and elevated costs in missile qualification testing.
Key takeaways
- Net orders reached $20 billion, driving a high book-to-bill ratio of 1.84x and lifting backlog to a record $105 billion.
- Sales rose 5% across all four segments, supporting the company’s guidance for accelerating sales growth in the second half.
- Operating margins were lower in Defense Systems (DS) and Space segments due to negative estimate at completion (EAC) adjustments on the GEM 63XL rocket motor and Stand-in Attack Weapon (SiAW) programs.
- The GEM 63XL anomaly is being addressed with a redesigned component, successfully tested in a static fire, expected to begin deliveries by year-end.
- Despite margin headwinds, Northrop raised full-year sales guidance to about $44 billion and increased EPS forecasts by $1.20, maintaining margin expectations overall.
Q1 2026
Apr 21, 2026
Northrop Grumman delivered a strong start to 2026 with 5% organic sales growth driven by increased modernizations and a robust defense budget environment, supported by solid bookings and expanding production capacity.
Key takeaways
- First quarter sales rose 5% organically, with notable growth in modernization programs such as the triad and missile systems.
- Defense budgets, including a proposed $1.5 trillion for 2027, underpin sustained demand across key programs like B-21, Sentinel, and munitions.
- Company invested over $1 billion in SRM and munition manufacturing, doubling tactical SRM capacity with further expansion slated for 2027.
- Sentinel program makes significant progress with prototype construction, aiming for Milestone B this year and initial operational capability in the early 2030s.
- B-21 stealth bomber testing is aggressive, with key milestones including aerial refueling trials, positioning for early 2027 delivery at Ellsworth AFB.
Q3 2025
Oct 21, 2025
Northrop Grumman reported solid Q3 2025 results with mid-single-digit revenue growth, a significant increase in free cash flow, and improved operating margins, despite a downward revision of full-year revenue guidance.
Key takeaways
- Achieved a book-to-bill ratio of 1.17, underscoring strong demand and backlog growth.
- Segment operating margin expanded to 12.3%, contributing to a 10% year-over-year increase in earnings per share.
- Free cash flow surged by 72% year over year, positioning the company to meet full-year guidance.
- Significant milestones in the B-21 aircraft program and a multibillion-dollar extension of the ground-based Midcourse Defense contract highlight ongoing strategic developments.
- Continued investment in advanced manufacturing and digital technologies reinforces Northrop Grumman’s commitment to innovation and operational efficiency.