Northrop Grumman Corporation

(New York Stock Exchange)
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Bullish +65

Northrop Grumman stock: Q3 sales rise 7 percent

Earnings report Guidance raised AI-generated analysis

πŸ“ˆ Northrop Grumman third-quarter sales increased 7 percent year over year to USD 11.1 billion, driven by strong demand in aerospace and defense.

πŸš€ Net awards reached a record USD 16.4 billion, expanding the total backlog to USD 109.6 billion as of September 30.

✈️ Aeronautics Systems led revenue growth with a 14 percent increase to USD 3.575 billion, followed by Defense Systems at 12 percent.

πŸ’° Operating income rose 2 percent to USD 1.269 billion, while segment operating income grew 5 percent to USD 1.345 billion.

πŸ“‰ The overall operating margin narrowed slightly to 11.4 percent from 11.9 percent due to mix and program execution factors.

πŸ’΅ Diluted earnings per share increased to USD 7.89, reflecting improved profitability across the business segments.

πŸ’§ Adjusted free cash flow jumped 44 percent to USD 1.81 billion, supported by higher operating cash flow and equipment sales.

πŸ”­ Management raised its 2026 segment operating income guidance midpoint by USD 65 million to a range of USD 4.94-5.04 billion.

πŸ’Ή MTM-adjusted EPS guidance was increased to a range of USD 29.35-29.75, up from the previous forecast.

πŸ›‘οΈ Key growth drivers include restricted programs, Sentinel, Virginia-class submarines, F-35 work, and E-2 aircraft orders.

⚠️ Investors are monitoring execution on complex fixed-price programs and government funding timelines for delivery schedules.

πŸ“Š Northrop Grumman stock traded at 496.70 euros on the Lang & Schwarz exchange as of November 2, 2026.

Bullish Signals
  • Northrop Grumman reported a 7 percent year-over-year increase in third-quarter sales to USD 11.1 billion, demonstrating strong demand for its aerospace and defense programs.
  • The company achieved record net awards of USD 16.4 billion, expanding its backlog to a historic USD 109.6 billion which provides long-term revenue visibility.
  • Segment operating income grew 5 percent to USD 1.345 billion, driven by higher sales in Aeronautics Systems and improved performance across the portfolio.
  • Adjusted free cash flow surged 44 percent to USD 1.81 billion, indicating strong balance sheet health and operational efficiency.
  • Management raised its full-year 2026 segment operating income guidance by USD 65 million at the midpoint, signaling confidence in future earnings.
  • MTM-adjusted EPS guidance was increased to a range of USD 29.35-29.75, reflecting positive outlook for profitability despite margin headwinds.
  • Third-quarter diluted earnings per share rose to USD 7.89 from USD 7.67 in the prior year period, showing consistent profit growth.
Risk Factors
  • The overall operating margin narrowed to 11.4 percent from 11.9 percent a year earlier, indicating pressure on profitability despite revenue growth.
  • Delivery timing for the record backlog remains dependent on complex program execution and government funding availability, introducing potential execution risk.
Full Analysis
Northrop Grumman reported robust third-quarter financial results, with sales rising 7 percent year over year to USD 11.1 billion. This growth was primarily driven by strong performance in its Aeronautics Systems and Defense Systems sectors, which saw increases of 14 percent and 12 percent respectively. The company also achieved record net awards totaling USD 16.4 billion, pushing its total backlog to a historic high of USD 109.6 billion as of September 30. Beyond top-line revenue, the company demonstrated improved profitability metrics despite a slight narrowing in overall operating margin. Operating income increased by 2 percent to USD 1.27 billion, while segment operating income rose 5 percent to USD 1.35 billion. Diluted earnings per share climbed to USD 7.89, and adjusted free cash flow surged 44 percent to USD 1.81 billion, aided by operational efficiency and asset sales. Following the earnings release, Northrop Grumman management raised its full-year 2026 guidance for both segment operating income and MTM-adjusted earnings per share. The company reaffirmed its sales outlook while maintaining its free cash flow projection. CEO Kathy Warden highlighted that the record backlog and strategic portfolio positioning are expected to sustain future growth, though investors remain focused on execution risks in complex fixed-price programs.