10-Q · July 21, 2026
Northrop Grumman grew Q2 revenue 5% to $10.876 billion and reported diluted EPS of $7.68, but EPS declined 6% year over year and operating margin fell from 13.8% to 10.1%, principally due to the absence of the…
Earnings analysis · 10-Q
NOC earnings analysis
Filed October 20, 2026 · Our reading of the company's report
The latest report
Northrop Grumman delivered a solid third quarter, with revenue of $11.122 billion and diluted EPS of $7.89, including a 9.7% EPS beat versus consensus. Adjusted free cash flow increased 44% to $1.810 billion, while…
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Northrop Grumman delivered a solid third quarter, with revenue of $11.122 billion and diluted EPS of $7.89, including a 9.7% EPS beat versus consensus. Adjusted free cash flow increased 44% to $1.810 billion, while Aeronautics Systems, awards and a record $110 billion backlog supported the result. Management raised 2026 segment operating income and MTM-adjusted EPS guidance, although consolidated and Mission Systems margin pressure and government-funding uncertainty remain risks. The extracted 10-Q text does not include sufficient balance-sheet, segment financial, gross-margin, operating-margin or capital-expenditure detail for further quantification.
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Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $7.89
What stood out
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Revenue increased and met consensus
Third-quarter revenue was $11.122 billion, up from $10.880 billion in Q2 2026 and $10.420 billion in Q3 2025. Revenue was approximately $11.1 million above the $11.111 billion consensus estimate.
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EPS beat estimates by 9.7%
Diluted EPS was $7.89 versus $7.68 in Q2 2026 and $7.67 in Q3 2025, and exceeded the $7.19 consensus estimate by $0.70, or 9.7%.
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Free cash flow strengthened
Adjusted free cash flow was $1.810 billion, an increase of 44% from the prior-year quarter’s $1.260 billion. The filing data provided does not disclose quarterly capital expenditures, so capex intensity cannot be calculated.
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Aeronautics and backlog supported results
Aeronautics Systems supported the operating improvement, while company disclosures cited strong awards and a record backlog of $110 billion. Segment-level revenue and operating-income amounts were not provided in the extracted filing text.
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Full-year outlook was raised
The company raised 2026 segment operating income guidance to $4.940 billion-$5.040 billion from $4.850 billion-$5.000 billion, a $65 million increase at the midpoint; MTM-adjusted EPS guidance rose to $29.35-$29.75 from $28.60-$29.10.
What to watch
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Consolidated margin pressure
The extracted filing does not provide a current-quarter consolidated gross or operating margin, but the accompanying results summary states that consolidated margin declined versus the prior period. Q2 2026 operating margin was 10.1%, versus 11.9% in Q3 2025.
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Mission Systems profitability weakened
Mission Systems profitability weakened according to the accompanying results summary. The extracted filing does not provide the current Mission Systems margin or operating-income amount, limiting quantification of the deterioration.
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Government funding and capital allocation
Government funding uncertainty remains a business risk. The company disclosed that the approximate dollar value remaining under its share-repurchase authorization was $2.5 billion as of September 30, 2026, but completed no repurchases during the quarter.
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Legal and regulatory exposure
The filing states that the company is subject to investigations, lawsuits, arbitration, claims and enforcement actions; potential consequences include fines, penalties, damages, sanctions, suspension or debarment. It separately identifies environmental proceedings involving potential monetary sanctions of $1.0 million or more.
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No new market-risk changes reported
No material changes to market risks were reported compared with the 2025 Form 10-K, and no changes to internal control over financial reporting materially affected, or were reasonably likely to materially affect, controls during the quarter ended September 30, 2026.
Management's outlook
The company raised 2026 segment operating income guidance to $4.940 billion-$5.040 billion from $4.850 billion-$5.000 billion, increasing the midpoint by $65 million. MTM-adjusted EPS guidance increased to $29.35-$29.75 from $28.60-$29.10, increasing the midpoint by $0.70. Revenue guidance is $43.750 billion-$44.250 billion; no prior revenue range was disclosed in the earnings release.
Earlier filings 2
10-Q · April 21, 2026
Northrop Grumman reported Q1 sales of $9,881 million, up $413 million (4.4%) versus Q1 2025, driven by product sales. Operating income rose to $989 million (10.0% operating margin) from $573 million (6.1%), and diluted…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.