Key Takeaways
- Q1 earnings per share of $6.14 exceeded analyst expectations of $6.05 by nine cents
- Quarterly revenue of $9.88 billion surpassed the $9.76 billion consensus, representing 4% year-over-year growth
- Aeronautics Systems division saw a 17% sales increase, fueled by B-21 and Sentinel program growth
- Operating profit jumped 73% to $989 million with segment margin expanding to 10.8%
- Shares declined approximately 1.6% in premarket hours as management maintained full-year projections
Northrop Grumman delivered first-quarter 2026 results that exceeded Wall Street’s expectations on both revenue and earnings, yet investors sent shares lower during early Tuesday trading.
The defense contractor reported earnings of $6.14 per share, topping the Street’s $6.05 estimate. Total revenue hit $9.88 billion, climbing 4% from the year-ago period’s $9.47 billion and surpassing analyst projections of $9.76 billion.
The standout performer was the company’s Aeronautics Systems division, which posted a 17% revenue increase. The surge was supported by a contract with the U.S. Air Force to ramp up B-21 stealth bomber manufacturing capacity and accelerate the Sentinel intercontinental ballistic missile program’s initial operational readiness.
Northrop Grumman Corporation, NOC
Operating profit soared 73% to reach $989 million for the quarter. The company’s operating margin widened dramatically to 10.0%, up from 6.1% in the comparable 2025 period. Much of this margin expansion resulted from the elimination of a $477 million charge related to the B-21 program that had pressured first-quarter 2025 performance.
Segment-level operating profit climbed 89% to $1.07 billion, while segment operating margin expanded from 6.0% to 10.8%.
The company secured $9.8 billion in net new contract awards during the three-month period. The total order backlog now stands at $95.6 billion—more than double the company’s annual revenue.
Organic revenue growth registered at 5% compared to the prior-year quarter.
Full-Year Outlook Remains Unchanged
Northrop maintained its existing 2026 full-year financial guidance without adjustment. Management continues to expect sales between $43.5 billion and $44.0 billion, with MTM-adjusted earnings per share in the $27.40 to $27.90 range.
Current analyst consensus sits at approximately $28 per share—slightly above the upper bound of company guidance. When the aerospace and defense company initially provided this outlook in January, Wall Street estimates were tracking closer to $29.
The free cash flow target remains between $3.1 billion and $3.5 billion. Segment operating income is projected to land in the $4.85 billion to $5.0 billion range.
CEO Kathy Warden characterized the quarterly performance as evidence of the organization’s capacity to execute amid “today’s unprecedented global demand environment.”
Market Response
Notwithstanding the earnings beat, NOC shares declined roughly 1.6% in premarket activity to $646.67. Meanwhile, both S&P 500 and Dow Jones futures showed gains during the same timeframe.
The stock had already appreciated 15% year-to-date heading into Tuesday’s earnings release, and has climbed approximately 24% over the trailing twelve months. Shares currently trade at about 23 times forward earnings, compared to roughly 19 times one year earlier.
This premium valuation may help explain why a solid quarterly performance failed to generate upward momentum in the stock price.
