Northrop Grumman’s first-quarter results for 2026 showed revenue and earnings per share slightly above Wall Street expectations, but the market responded negatively. Management explained that growth was fueled by continued demand for defense modernization, notably the accelerating B-21 bomber and Sentinel programs, as well as munitions and missile defense. CEO Kathy Warden highlighted increased production investments and operational execution as key contributors to higher operating margins. However, the company acknowledged ongoing supply chain pressures and longer international sales cycles, which tempered investor enthusiasm. Warden emphasized, “We are seeing an opportunity-rich environment, but timing on converting our record backlog remains a challenge.”
Is now the time to buy NOC? Find out in our full research report (it’s free for active Edge members).
Northrop Grumman (NOC) Q1 CY2026 Highlights:
- Revenue: $9.88 billion vs analyst estimates of $9.76 billion (4.4% year-on-year growth, 1.2% beat)
- Adjusted EPS: $6.14 vs analyst estimates of $6.06 (1.3% beat)
- Adjusted EBITDA: $1.36 billion vs analyst estimates of $1.39 billion (13.8% margin, 1.8% miss)
- The company reconfirmed its revenue guidance for the full year of $43.75 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $27.65 at the midpoint
- Operating Margin: 10%, up from 6.1% in the same quarter last year
- Backlog: $95.61 billion at quarter end, up 3% year on year
- Organic Revenue rose 5% year on year (beat)
- Market Capitalization: $81.71 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Northrop Grumman’s Q1 Earnings Call
- Robert Stallard (Vertical Research): asked about B-21 production timeline and capital spending. CEO Kathy Warden explained most capital investment will occur between 2027 and 2029, with committed quantities reducing risk of program curtailment.
- Gautam Khanna (TD Securities): requested updates on Sentinel program timing. Warden detailed acceleration initiatives, including the silo prototype and plans for first flight in 2027, with initial capability in the early 2030s.
- Peter Arment (Baird): inquired about accelerating international demand, especially in the Middle East. Warden noted heightened urgency, steps to expedite export approvals, and longer sales cycles limiting near-term impact.
- Kristine Liwag (Morgan Stanley): questioned what is needed for double-digit growth. Warden cited winning new competitive programs, faster missile component ramp, and supplier scaling as prerequisites for higher growth rates.
- Seth Seifman (JPMorgan): asked about B-21 profitability under the new agreement. CFO John Green said increased production costs are offset by improved long-term margins, with potential for expanded profitability as production scales.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) updates on B-21 and Sentinel production milestones and delivery schedules, (2) signs of accelerating international order conversion, especially in the Middle East and Europe, and (3) progress on supply chain scaling and execution in support of new contract wins. Additional developments in federal defense budgets and new competitive awards, such as F/A-XX, could also play a significant role in shaping future results.
Northrop Grumman currently trades at $576.14, down from $656.98 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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