Quick Summary
- Northrop Grumman reported Q1 earnings per share of $6.14, exceeding the consensus forecast of $6.05 by $0.09
- Quarterly revenue totaled $9.88 billion, marking a 4% increase from the prior year and surpassing the $9.76 billion projection
- The Aeronautics Systems division saw a 17% sales increase, fueled by expanded B-21 and Sentinel program activities
- Operating profit jumped 73% to reach $989 million; segment margins climbed to 10.8%
- Shares declined approximately 1.6% in premarket hours despite outperformance, with annual guidance remaining steady
Northrop Grumman delivered first-quarter 2026 results that exceeded analyst projections across key metrics, yet investors responded by sending shares lower during Tuesday’s premarket session.
The defense contractor reported earnings per share of $6.14, topping the Street’s $6.05 expectation. Total revenue hit $9.88 billion, representing a 4% climb from the $9.47 billion recorded in the year-ago quarter and beating the analyst consensus of $9.76 billion.
The standout performer was the Aeronautics Systems division, which posted a 17% revenue surge. This growth stemmed from a recently finalized agreement with the U.S. Air Force aimed at ramping up B-21 bomber manufacturing infrastructure and accelerating the Sentinel intercontinental ballistic missile program timeline.
Northrop Grumman Corporation, NOC
Operating profit climbed 73% to $989 million for the quarter. The company’s operating margin expanded significantly to 10.0%, compared to just 6.1% in the corresponding 2025 period. Much of this margin enhancement reflected the absence of a $477 million charge related to B-21 cost overruns that had negatively impacted year-ago results.
Segment-level operating profit increased 89% to $1.07 billion. Segment operating margin strengthened to 10.8% versus 6.0% previously.
The company secured $9.8 billion in new contract awards during the three-month period. Its total backlog now stands at $95.6 billion — representing more than double the company’s anticipated annual revenue.
Organic revenue growth registered at 5% compared to the prior-year quarter.
Full-Year Projections Remain Intact
Northrop maintained its previously issued 2026 outlook without adjustment. The aerospace and defense firm continues to anticipate total sales ranging from $43.5 billion to $44.0 billion, with MTM-adjusted earnings per share expected between $27.40 and $27.90.
Current Wall Street consensus calls for EPS around $28 — sitting above the company’s upper guidance threshold. Notably, when the company initially provided this outlook in January, analyst estimates were positioned closer to $29.
The free cash flow projection held at $3.1 billion to $3.5 billion. Segment operating income is targeted between $4.85 billion and $5.0 billion for the full year.
Chief Executive 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 retreated approximately 1.6% during premarket activity to $646.67. This decline occurred while both S&P 500 and Dow futures were registering gains.
The stock had already appreciated 15% year-to-date heading into Tuesday’s report, with a 12-month gain of roughly 24%. The shares currently trade at approximately 23 times forward earnings estimates, elevated from about 19 times a year earlier.
This premium valuation multiple may help explain why investors viewed the solid quarterly performance as insufficient to justify further price appreciation.
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