TLDR
- Northrop Grumman reported Q4 earnings of $7.23 per share on sales of $11.7 billion, beating analyst estimates of $6.98 and $11.6 billion
- Stock dropped 0.6% despite the earnings beat as the company’s 2026 guidance fell short of Wall Street expectations
- Full-year 2026 EPS outlook of $27.40 to $27.90 missed analyst projections of $28.91
- Revenue forecast of $43.5 billion to $44 billion came in below the $44.3 billion Wall Street expected
- Company’s backlog reached a record $95.7 billion with more orders than sales in Q4
Northrop Grumman delivered stronger-than-expected fourth-quarter results on Tuesday but couldn’t escape a stock decline. The defense contractor reported earnings of $7.23 per share on revenue of $11.7 billion.
Wall Street had projected $6.98 per share and $11.6 billion in sales. The company beat on both metrics.
A year earlier, Northrop posted $6.39 per share and $10.7 billion in revenue. The quarter showed clear year-over-year improvement.
Northrop Grumman Corporation, NOC
Despite the positive numbers, shares fell 0.6% to $656.82 in early trading. The market’s reaction came down to one thing: guidance.
Northrop’s 2026 outlook disappointed investors who had pushed the stock higher in recent months. The company expects full-year earnings between $27.40 and $27.90 per share.
Analysts were looking for $28.91. That’s a meaningful gap when expectations run high.
Revenue guidance also came up short. Northrop forecast sales between $43.5 billion and $44 billion for 2026.
Wall Street wanted $44.3 billion. The company’s projection represents roughly 5% growth.
Backlog Reaches Record Territory
The quarter brought one clear bright spot. Northrop’s backlog climbed to a record $95.7 billion.
Orders exceeded sales during the three-month period. That means future work continues to pile up.
The stock’s recent performance helps explain Tuesday’s sell-off. Shares had jumped 33% over the prior 12 months.
That rally pushed the valuation to 23 times forward earnings. A year ago, the multiple sat at just 18 times.
Higher defense spending drove much of the stock’s gains. Investors bought in anticipation of continued growth.
Operating Profit Outlook Holds Steady
Northrop’s operating profit guidance offered some reassurance. The company expects roughly $4.9 billion for 2026.
That figure slightly beats the $4.8 billion analysts currently project. It’s one area where guidance actually exceeded expectations.
Jefferies analyst Sheila Kahyaoglu called the quarter a “strong beat.” She noted the outlook came in lower because of weakness in the defense systems segment.
That business makes missiles and ammunition. It appears to be facing some headwinds.
Sales growth patterns are shifting at Northrop. From 2020 to 2025, the company grew revenue at about 3% annually.
The pace is picking up now. Management’s 5% growth target for 2026 shows acceleration.
The company filed its financial results with the Securities and Exchange Commission on Tuesday. The Form 8-K included the earnings release as an exhibit.
No additional operational details appeared in the SEC filing. The New York Stock Exchange lists Northrop’s common stock under ticker NOC.
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