NOC · Northrop Grumman Corporation

Northrop Grumman delivered robust Q1 2026 results with sales up 4% to $9.9 billion, primarily driven by a 17% increase in Aeronautics Systems to $3.3 billion from higher B-21 and restricted program volumes following agreements with the U.S. Air Force to expand production capacity and accelerate Sentinel initial operating capability. Operating income surged 73% to $989 million, with margin expansion to 10.0%, largely due to the absence of a $477 million B-21 loss provision from the prior year at Aeronautics, though partially offset by a lower FAS/CAS adjustment. Segment operating income rose 89% to $1,072 million, led by Aeronautics ($305 million vs. -$183 million) and Mission Systems (20% higher at $433 million). Diluted EPS jumped 85% to $6.14, supported by higher earnings before taxes and a lower effective tax rate of 15.0% from research credits. CEO Kathy Warden highlighted strong bookings, mid-single-digit organic sales growth (5%), and performance amid global demand. Net awards of $9.8 billion grew backlog to $95.6 billion, including significant restricted programs and F-35 awards. Free cash flow remained stable at -$1.8 billion, reflecting typical Q1 working capital timing. The company reaffirmed 2026 guidance, signaling confidence in sales of $43.5-44.0 billion, segment operating income of $4.85-5.00 billion, and MTM-adjusted EPS of $27.40-27.90, with free cash flow of $3.1-3.5 billion.