Northrop Grumman Earnings Beat Estimates

Northrop Grumman reported first-quarter results on April 21, 2026, with earnings surpassing forecasts while reaffirming its FY2026 guidance. Investors will focus on near-term cash-flow timing and a program-related charge.

First-Quarter Results and Segment Performance

Northrop Grumman posted first-quarter sales of $9.9 billion, a 4% increase year-over-year, with organic sales rising about 5%. Adjusted diluted earnings per share reached $6.14, up 85% from $3.32, beating consensus estimates near $6.05. Net earnings rose 82% to $875 million.

Segment operating income exceeded $1 billion, and margins expanded to 10.8% from 6.0% a year earlier, driven by strength in Aeronautics and Mission Systems. Aeronautics Systems led revenue growth with a 17% increase, fueled by higher B-21 production, activity in restricted programs, and the TACAMO contract ramp-up.

Space Systems recorded a $71 million unfavorable adjustment related to the GEM 63XL program and cited the wind-down of the Next Generation Interceptor (NGI) program as a headwind.

Backlog, Cash Flow, and FY2026 Guidance

The company reported a backlog of $95.6 billion. Free cash flow used $1.8 billion in the quarter, reflecting typical first-half working-capital timing. Northrop Grumman reaffirmed its FY2026 guidance, projecting sales between $43.5 billion and $44.0 billion, segment operating income of $4.85 billion to $5.0 billion, mark-to-market (MTM) adjusted EPS of $27.40 to $27.90, and free cash flow of $3.1 billion to $3.5 billion. The outlook is based on the company’s assessment of the macroeconomic and defense-demand environment and compares with a consensus MTM-adjusted EPS near $27.97.

The combination of a top-line and bottom-line beat, reaffirmed full-year outlook, and near-term cash-flow timing will focus investor attention on the Space Systems charge and working-capital patterns as they assess the quarter’s implications.