Northrop Grumman stock: Backlog hits record as profit outlook rises

Northrop Grumman reported stronger third-quarter results on October 20, 2026, with sales up 7 percent year over year to 11.122 billion US dollars. The aerospace and defense company also raised its 2026 outlook for segment operating income and market-to-market-adjusted earnings per share, according to its earnings release filed with the SEC.

Sales growth across four segments

Third-quarter sales reached 11.122 billion US dollars, compared with 10.423 billion US dollars a year earlier. Aeronautics Systems led the expansion with a 14 percent increase to 3.575 billion US dollars, while Defense Systems sales rose 12 percent to 2.307 billion US dollars. Mission Systems and Space Systems each grew 2 percent.

Net earnings increased 2 percent to 1.124 billion US dollars, and diluted earnings per share rose to 7.89 US dollars from 7.67 US dollars. Total operating income advanced 2 percent to 1.269 billion US dollars, although the operating margin rate declined to 11.4 percent from 11.9 percent. Northrop Grumman attributed the margin pressure mainly to a lower FAS/CAS operating adjustment.

Record backlog strengthens visibility

Net awards totaled 16.4 billion US dollars during the quarter, lifting backlog to 109.6 billion US dollars as of September 30. Awards included 4.6 billion US dollars for restricted programs, 2.0 billion US dollars for Sentinel, 1.4 billion US dollars for Virginia-class submarines, 1.3 billion US dollars for F-35 work and 1.0 billion US dollars for E-2 aircraft.

The 1.5 times book-to-bill ratio indicates that new orders exceeded quarterly sales. Chief Executive Kathy Warden said the record backlog, the company's portfolio and its investments should support future sales and earnings growth. The backlog gives Northrop Grumman a significant order base, but execution, government budgets, supply chains and contract costs remain important risks to the outlook.

Profit outlook moves higher

Northrop Grumman raised its 2026 segment operating income range to 4.940 billion to 5.040 billion US dollars from 4.850 billion to 5.000 billion US dollars. The midpoint increased by 65 million US dollars. MTM-adjusted EPS guidance moved to 29.35 to 29.75 US dollars from 28.60 to 29.10 US dollars. The sales outlook remained at 43.750 billion to 44.250 billion US dollars, while adjusted free cash flow guidance stayed at 3.100 billion to 3.500 billion US dollars.

Northrop Grumman stock traded at 495.10 euros on Lang & Schwarz at 14:10:10 CET on Tuesday, November 3, 2026. Investors are weighing the improved profit outlook and record backlog against lower quarterly operating margin and the delivery risks inherent in large defense programs.

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