Northrop Grumman stock: Backlog drives higher 2026 profit view

Published on 11/05/2026 at 14:23 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Northrop Grumman stock faces a stronger order book after third-quarter sales rose 7 percent. Management raised profit guidance but kept its sales outlook unchanged.

Backlog strengthens earnings visibility

Third-quarter sales rose 7 percent to 11.122 billion US dollars, with growth in all four operating sectors.
Net awards reached 16.4 billion US dollars and lifted total backlog to 109.6 billion US dollars at September 30.
Northrop Grumman raised its 2026 MTM-adjusted EPS and segment operating income ranges while leaving sales guidance unchanged.

Northrop Grumman, US6668071029, Illustration mit AI erstellt.

Northrop Grumman reported stronger third-quarter demand on October 20, 2026, and raised its 2026 profit outlook after a surge in contract awards. The company said in its SEC-filed earnings release that third-quarter sales increased 7 percent year over year to 11.122 billion US dollars.

All four operating sectors contributed to the increase. Aeronautics Systems sales advanced 14 percent to 3.575 billion US dollars, while Defense Systems sales climbed 12 percent to 2.307 billion US dollars. Mission Systems and Space Systems each grew sales by 2 percent.

Orders expand future revenue visibility

Northrop Grumman secured 16.4 billion US dollars in net awards during the quarter, producing a book-to-bill ratio of 1.5 times. Total backlog reached 109.6 billion US dollars at September 30, including major awards of 2.0 billion US dollars for the Sentinel program, 1.4 billion US dollars for Virginia-class submarines and 1.3 billion US dollars for the F-35 program.

The backlog provides a stronger base for future sales, but execution remains central to the investment case. Aeronautics Systems benefited from higher F-35, B-21 and B-2 sustainment activity, while Defense Systems gained from Sentinel and rocket motor programs. Mission Systems faced lower operating income because a favorable prior-year contract adjustment did not recur.

Higher earnings target, steady sales view

Net earnings rose 2 percent to 1.124 billion US dollars, while diluted earnings per share increased to 7.89 US dollars from 7.67 US dollars a year earlier. The earnings increase also reflected a lower effective tax rate of 13.4 percent, compared with 16.9 percent in the prior-year quarter. Operating margin narrowed to 11.4 percent from 11.9 percent, making the profit improvement less dependent on sales growth alone.

Northrop Grumman raised its 2026 MTM-adjusted EPS outlook to 29.35 to 29.75 US dollars from 28.60 to 29.10 US dollars. The midpoint increased by 0.70 US dollars. Segment operating income guidance rose to 4.940 billion to 5.040 billion US dollars from 4.850 billion to 5.000 billion US dollars, while sales guidance stayed at 43.750 billion to 44.250 billion US dollars. Adjusted free cash flow guidance remained 3.1 billion to 3.5 billion US dollars.

Chief Executive Kathy Warden said the record backlog, portfolio positioning and continued investment should support sales and earnings growth as the company moves toward its 2027 outlook. The release also highlights risks from government funding, procurement priorities, inflation, labor availability and supply-chain conditions.

Northrop Grumman stock traded at 462.25 euros on Lang & Schwarz at 14:12 CET on Thursday, November 5, 2026. You can follow the real-time quote of Northrop Grumman stock.

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