Northrop Grumman Earnings Beat, Raises 2026 Outlook

Northrop Grumman reported earnings above expectations on July 21, 2026, and raised its full-year 2026 sales and adjusted earnings-per-share (EPS) guidance, citing sustained weapons demand and a larger backlog that strengthened program momentum.

Results and 2026 Guidance

The company released its second-quarter earnings in a Form 8-K filing and posted supporting materials on its investor-relations website. The report showed Q2 sales of $10.88 billion, up about 5% from $10.35 billion a year earlier. GAAP net income was $1.09 billion, or diluted EPS of $7.68, compared with $8.15 a year earlier. The prior-year EPS included a $1.04-per-share gain from divesting its training-services business. The reported EPS exceeded consensus estimates near $6.84, implying an $0.84 per-share upside.

Northrop Grumman raised its full-year 2026 sales guidance by $250 million to a range of $43.75 billion to $44.25 billion and lifted its adjusted EPS outlook to $28.60 to $29.10 per share from prior ranges cited earlier in the year. Management attributed the update to sustained weapons demand and program momentum, with backlog conversion and ongoing execution supporting assumptions of mid-single-digit sales growth. Earlier commentary had set free cash flow guidance at $3.1 billion to $3.5 billion and projected capital spending of $1.85 billion, including an additional $200 million to support increased B-21 production capacity.

Backlog and Program Drivers

Total backlog rose 9% year over year to $104.7 billion as of June 30, 2026, a buildup the company cited as supporting the outlook revision. Aeronautics Systems, the largest revenue segment, posted a 13% year-over-year increase in second-quarter sales, driven by the B-21 Raider bomber program and classified work. Defense Systems revenue rose about 5%, helped by sales in the Sentinel program, the land-based leg of the U.S. nuclear triad. The company linked the updated outlook to sustained weapons demand amid global geopolitical tensions, with backlog conversion underpinning the guidance revision.

The quarter’s upside and firmer 2026 guidance highlight that sustained weapons demand and backlog conversion are driving higher revenue and profit expectations. How the company balances free cash flow targets and planned capital spending, including capacity investments tied to the B-21 program, may influence expectations for cash returns and reinvestment as the year progresses.