Northrop Grumman Corporation

(New York Stock Exchange)
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Bullish +75

Northrop Grumman stock: Record backlog, higher 2026 profit outlook

Earnings report Guidance raised AI-generated analysis

πŸ“ˆ Third-quarter sales increased 7 percent year over year to reach $11.1 billion.

πŸ“¦ Net awards of $16.4 billion pushed the total backlog to a record $109.6 billion.

πŸš€ Aeronautics Systems revenue grew 14 percent while Defense Systems advanced 12 percent.

πŸ’° Diluted earnings per share rose to $7.89 from $7.67 in the prior year.

πŸ“ˆ Management raised 2026 segment operating income guidance to $4.94 billion–$5.04 billion.

πŸ“ˆ Adjusted earnings per share guidance for 2026 was increased to $29.35–$29.75.

πŸ’΅ The company maintained its sales outlook between $43.75 billion and $44.25 billion.

πŸ’° Adjusted free cash flow guidance remains steady at $3.1 billion to $3.5 billion.

πŸ›οΈ Major contract wins include restricted programs, Sentinel, Virginia-class submarines, and E-2 aircraft.

βš–οΈ Higher profit outlook is attributed to stronger operations and a lower tax rate.

Bullish Signals
  • Northrop Grumman achieved record backlog of $109.6 billion following $16.4 billion in net awards, securing long-term revenue visibility.
  • Third-quarter sales grew 7 percent year over year to $11.1 billion with double-digit growth in Aeronautics Systems and Defense Systems.
  • Management raised 2026 segment operating income guidance to $4.94 billion–$5.04 billion, reflecting stronger operational performance.
  • Adjusted earnings per share guidance for 2026 was increased to $29.35–$29.75, demonstrating improved profitability expectations.
  • The company maintained its sales outlook while upgrading profit guidance, indicating confidence in execution and margin expansion.
Full Analysis
Northrop Grumman reported a strong third quarter with sales rising 7 percent year over year to $11.1 billion, driven by growth across all four operating sectors including Aeronautics Systems and Defense Systems. The company achieved a record backlog of $109.6 billion following net awards of $16.4 billion in the quarter, resulting in a 1.5 book-to-bill ratio that strengthens long-term revenue visibility for major programs like the F-35 and Virginia-class submarines. Management raised its full-year 2026 guidance for segment operating income to a range of $4.94 billion to $5.04 billion and adjusted earnings per share to $29.35 to $29.75, reflecting improved operating performance despite higher corporate costs and interest expenses. While the sales outlook remains unchanged at $43.75 billion to $44.25 billion, Northrop Grumman highlighted that lower tax rates contributed to the higher profit guidance, with adjusted free cash flow expectations staying between $3.1 billion and $3.5 billion.