Northrop Grumman (NOC) Q3 2026 earnings summary

Executive summary

• Q3 sales increased 7% YoY to $11.122B; segment operating income rose 5% to $1.345B and diluted EPS increased 3% to $7.89.

• Net awards of $16.4B lifted backlog to $109.597B; Q3 book-to-bill was 1.5x.

• Strong demand and execution supported higher FY2026 segment operating income and MTM-adjusted EPS guidance; FY2027 sales growth is projected at 5%–7%.

Financial highlights

• Q3 operating income rose 2% to $1.269B, while operating margin declined to 11.4% from 11.9%.

• Adjusted free cash flow was $1.810B, up 44% YoY, including $371M in proceeds from equipment sold to a customer; operating cash flow was $1.745B and capex was $306M.

• 9M sales rose 5% to $31.879B; net earnings increased 12% to $3.093B and diluted EPS rose 14% to $21.72.

• Backlog was up 20% YoY to $109.597B, and 15% from Dec. 31, 2025; ~35% is expected to convert to revenue within 12 months and ~55% within 24 months.

Outlook and guidance

• FY2026 sales guidance remains $43.75B–$44.25B; segment operating income guidance increased to $4.940B–$5.040B from $4.850B–$5.000B.

• FY2026 MTM-adjusted EPS guidance rose to $29.35–$29.75 from $28.60–$29.10; adjusted free cash flow guidance remains $3.1B–$3.5B.

• FY2027 sales growth is projected at 5%–7%; segment operating margin is expected to expand 10–20 bps beyond the FY2026 guidance midpoint, with adjusted free cash flow of $3.3B–$3.7B.

• FY2027 capex is projected at ~4.5% of sales, or ~$2.1B; growth is expected to accelerate further in 2028.