Northrop Grumman Q3 2026 earnings: profit beat, record backlog, raised outlook
Northrop Grumman beat profit estimates and raised its 2026 outlook on record order backlog and broad segment growth, even as revenue came in slightly below forecasts.
| Q3 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $7.89 | $7.25 | +8.8% |
| Revenue | $11.12B | $11.25B | -1.2% |
Key takeaways
- Profit easily beat Wall Street’s estimate while revenue came in just under forecasts; growth was broad-based, with all four of the company’s business segments (Aeronautics, Defense Systems, Mission Systems and Space) posting higher sales, led by double-digit growth at Aeronautics Systems and Defense Systems.
- Northrop Grumman raised its full-year 2026 profit outlook: it now expects adjusted earnings per share of $29.35 to $29.75, up from $28.60 to $29.10, and nudged up its segment operating income range. Its sales forecast ($43.75 billion to $44.25 billion) and cash flow forecast were left unchanged.
- The order backlog — unfulfilled contract work still to be delivered — hit a record roughly $110 billion, up sharply from a year earlier. The company booked about $16 billion in new orders in the quarter, more than one and a half times what it billed customers, a sign demand for its defense and space programs continues to outpace current output.
- Cash generated from the business jumped about 44% from a year ago to roughly $1.8 billion, though a chunk of that increase came from a one-time $371 million payment tied to selling equipment to a customer rather than from core operations.
- The operating margin — the share of each sales dollar left over after running costs — slipped slightly versus a year ago. The company said the dip was mainly due to a smaller favorable pension-related accounting adjustment, not weaker performance in its actual programs; profitability on the underlying contract work was roughly steady.
- Over the trailing twelve months the company has been growing earnings per share faster than revenue (EPS up nearly 16% versus revenue up about 6%), reflecting both the modest margin trends seen this quarter and the effect of share buybacks that shrink the share count.
- The results and raised guidance pushed shares higher after the report, as investors weighed the mix of a profit beat and record order backlog against the narrow revenue miss and smaller cash-flow quality caveat.
Q3 2026 in context
| Metric | Sep 2026 | Sep 2025 | Change |
|---|---|---|---|
| Revenue | $11.1B | $10.4B | +6.7% |
| Net income | $1.1B | $1.1B | +2.2% |
| Free cash flow | $1.4B | $1.3B | +14.6% |
| Diluted EPS | $7.89 | $7.67 | +2.9% |
| Operating margin | 11.4% | 11.9% | -0.5 pts |
| Net margin | 10.1% | 10.6% | -0.4 pts |
Figures for the quarter ended Sep 2026 and the quarter ended Sep 2025, as reported to the SEC.
How the stock took it
Northrop Grumman Corp closed at $510.65 on Oct 19, 2026, the last session before the report, and at $539.31 on Oct 21, 2026, the first session after it — +5.6% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 20.1% | Trailing 12 months |
| Operating margin | 10.7% | Trailing 12 months |
| Net profit margin | 10.5% | Trailing 12 months |
| Pretax margin | 12.3% | Trailing 12 months |
| EPS | $31.47 | Trailing 12 months |
| Revenue growth (YoY) | 5.9% | Trailing 12 months |
| EPS growth (YoY) | 15.9% | Trailing 12 months |
| Return on equity | 26.6% | Trailing 12 months |
Sources: company report · Investing.com