Northrop Grumman (NOC) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales rose 4% year-over-year to $9.88–$9.9 billion, driven by Aeronautics, Defense, and Mission Systems, with robust global defense demand and portfolio alignment to U.S. FY27 budget priorities.

• Net earnings increased 82% to $875 million, with diluted EPS up 85% to $6.14, reflecting higher operating income and pension benefits.

• Operating margin improved to 10.0%–10.8% from 6.0%–6.1% year-over-year, driven by strong segment performance and absence of prior year B-21 loss provision.

• Backlog reached $95.6–$96 billion, with $9.8 billion in net new awards in Q1, providing over two years of sales coverage.

• Agreements with the U.S. Air Force expanded B-21 production capacity by 25% and accelerated Sentinel program milestones.

Financial highlights

• Q1 2026 sales: $9.88–$9.9 billion, up 4% year-over-year; organic sales up 5%.

• Segment operating income rose to $1.07 billion, with margin rate improving to 10.8%.

• Diluted EPS was $6.14, up from $3.32 year-over-year.

• Free cash flow for Q1 2026 was $(1.8)–$(1.82) billion, flat year-over-year.

• Cash and cash equivalents at quarter-end were $2.1 billion.

Outlook and guidance

• 2026 sales guidance reaffirmed at $43.5–$44.0 billion.

• Segment operating income expected at $4.85–$5.0 billion; MTM-adjusted EPS at $27.40–$27.90.

• Free cash flow guidance set at $3.1–$3.5 billion; capital expenditures for 2026 guided at ~$1.85 billion.

• Segment sales guidance: Aeronautics mid $13B, Defense mid-high $8B, Mission high $12B, Space high $11B.

• Sales expected to accelerate throughout the year, with high single-digit sequential growth in Q2.