Key Highlights
- Northrop Grumman delivered Q1 earnings per share of $6.14, exceeding the consensus forecast of $6.05 by nine cents
- Quarterly revenue totaled $9.88 billion, representing a 4% increase from the prior year and surpassing the $9.76 billion projection
- The Aeronautics Systems division reported a 17% sales increase, fueled by B-21 and Sentinel program advancements
- Operating income jumped 73% to $989 million, while segment operating margin climbed to 10.8%
- Shares declined approximately 1.6% during premarket hours following the earnings announcement, with full-year projections remaining steady
Northrop Grumman exceeded analyst expectations across key financial metrics for the first quarter of 2026, yet shares trended downward during early Tuesday trading sessions.
The aerospace and defense company reported earnings per share of $6.14, topping the $6.05 consensus figure. Quarterly revenue hit $9.88 billion, marking a 4% climb from the $9.47 billion recorded in Q1 2025 and surpassing analyst projections of $9.76 billion.
The Aeronautics Systems division emerged as the primary growth catalyst, posting a 17% sales increase. This performance stemmed from a contract with the U.S. Air Force to enhance B-21 bomber production infrastructure and accelerate the Sentinel program’s path to initial operating capability.
Northrop Grumman Corporation, NOC
Operating income climbed 73% to reach $989 million for the quarter. The company’s operating margin expanded to 10.0%, compared to 6.1% during the same period last year. This margin improvement benefited significantly from the elimination of a $477 million B-21 loss provision that had impacted first-quarter 2025 performance.
Segment operating income advanced 89% to $1.07 billion. The corresponding segment operating margin rose to 10.8%, up from 6.0% year-over-year.
The company secured $9.8 billion in net new contract awards during the three-month period. Total backlog reached $95.6 billion — a figure exceeding twice the company’s annual revenue.
Organic sales registered 5% growth compared to the prior-year quarter.
Full-Year Projections Remain Intact
Northrop maintained its existing full-year 2026 financial outlook. Management continues to anticipate sales ranging from $43.5 billion to $44.0 billion, with MTM-adjusted earnings per share projected between $27.40 and $27.90.
Current analyst consensus estimates place EPS at approximately $28 — positioned above the upper boundary of the guidance range. When the company initially provided its outlook in January, Wall Street expectations were tracking closer to $29.
The company affirmed its free cash flow guidance of $3.1 billion to $3.5 billion for the year. Segment operating income is anticipated to fall between $4.85 billion and $5.0 billion.
CEO Kathy Warden characterized the quarterly performance as evidence of the company’s capacity to execute amid “today’s unprecedented global demand environment.”
Market Response
Despite beating estimates, NOC shares declined roughly 1.6% during premarket activity to $646.67. Both S&P 500 and Dow futures showed gains during the same timeframe.
Shares had already appreciated 15% year-to-date heading into Tuesday’s report, with gains of approximately 24% over the trailing twelve months. The stock currently trades at roughly 23 times forward earnings, up from about 19 times twelve months ago.
This elevated valuation multiple likely contributed to the muted market reaction following otherwise strong quarterly results.
