Northrop Grumman beats Q2 estimates, raises guidance

Investing.com -- Northrop Grumman Corporation (NYSE: NOC) reported second-quarter earnings on Tuesday ahead of the open, topping analyst expectations, with the company also raising its full-year guidance.

Adjusted EPS came in at $7.68, beating the consensus estimate of $6.82 by $0.86. Revenue reached $10.9 billion, surpassing the $10.8 billion analyst estimate and marking a 5% increase from $10.4 billion in the same quarter last year.

The company raised its full-year 2026 guidance, now expecting sales between $43.75 billion and $44.25 billion, up $250 million from prior guidance. The midpoint of $44.0 billion is slightly above the analyst consensus of $43.99 billion. Northrop also increased its MTM-adjusted EPS guidance to a range of $28.60 to $29.10, up $1.20 from previous expectations.

Shares fell 1.5% following the announcement.

"Northrop Grumman achieved a new record backlog, driven by robust global demand for our products," said Kathy Warden, chair, chief executive officer and president. "We are raising our sales and EPS guidance for the year based on our confidence in our team and the demand for our technologies."

The company reported net awards of $20 billion in the quarter, pushing backlog to a record $105 billion. Significant awards included $7.6 billion for Sentinel, $4.3 billion for restricted programs, and $1.0 billion for F-35.

Operating income declined 23% to $1.1 billion from $1.4 billion in the prior year, primarily due to a $231 million gain from the 2025 training services divestiture. Operating margin rate decreased to 10.1% from 13.8%.

Aeronautics Systems led revenue growth with a 13% increase to $3.5 billion, driven by higher volume on B-21 and other restricted programs. Defense Systems operating income fell 38% to $156 million, impacted by a $68 million unfavorable adjustment on the Stand-in Attack Weapon program. Space Systems recorded a $91 million unfavorable adjustment on the GEM 63XL program.

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