Northrop Grumman reported second quarter 2026 earnings per share of $7.68, beating analyst estimates by 12.61%. Sales for the quarter reached $10.9 billion, surpassing the consensus estimate of $10.803 billion and rising 5% year-over-year. The company raised its full-year 2026 sales guidance to $44 billion and increased EPS projections by $1.20, supported by a record backlog of $105 billion and a book-to-bill ratio of 1.84.

Financial Performance Summary

The following table details Northrop Grumman's performance against analyst estimates and year-ago figures:

Operational Highlights and Guidance

Sales increased by 5% across all four business segments, though operating margins were impacted by negative estimates-at-completion (EAC) adjustments in the Space and Defense Systems segments. Specifically, the Space segment faced unfavorable adjustments on the GEM 63XL program, while Defense Systems saw higher projected costs on the Stand-in Attack Weapon (SiAW) program. Despite these pressures, the company generated $20 billion in net awards during the quarter.

Looking ahead, Northrop Grumman increased its full-year 2026 sales guidance to a range of $43.75 billion to $44.25 billion, representing over 5% organic growth. The company raised its adjusted EPS guidance to a range of $28.60 to $29.10, an increase of $1.20 at the midpoint. Management affirmed its adjusted free cash flow guidance of $3.1 billion to $3.5 billion. The record backlog and strong bookings provide visibility for accelerated sales growth in the second half of the year.

Northrop Grumman Corporation has raised its financial guidance for the full fiscal year 2026, exceeding analyst expectations. The company increased its adjusted earnings per share (EPS) outlook to a range of $28.60-$29.10, up from the previous guidance of $27.40-$27.90. This new range compares favorably to the analyst consensus estimate of $27.97. Additionally, the firm revised its sales projection to $43.750 billion-$44.250 billion, an increase from the prior $43.500 billion-$44.000 billion forecast, against a consensus estimate of $43.987 billion.

Market Context and Analyst Targets

The updated guidance follows a period of market rotation toward defensive equities, which has supported defense stocks. Investors are also monitoring a proposed $1.5 trillion defense budget framework for fiscal 2027. Despite the positive outlook, several analysts have recently adjusted their price targets. The following table details recent analyst actions:

Recent Performance and Strategic Developments

Northrop Grumman has a history of outperforming consensus estimates, having beaten EPS expectations in four consecutive quarters. In the first quarter, the company reported EPS of $6.14 against a $6.07 estimate. The broader sector continues to benefit from increased defense spending by NATO allies, who have committed over $1.21 trillion in additional expenditure since the previous administration. Last year, NATO allies allocated more than $120 billion in additional defense spending and purchased over $54 billion of U.S. defense equipment in 2025.