Northrop Grumman Q2 2026: sales up 5.1%, EPS beats, guidance raised
Northrop Grumman beat on earnings and raised full-year guidance, but the quality of the quarter is mixed: the EPS beat leaned on a 6.3% tax rate, segment margins fell to 10.6%, and first-half free cash flow is still negative. Read it as a demand story — a record $104.7 billion backlog — running ahead of a cost story.
1 · Expected vs. Actual
Free preview belowGAAP diluted EPS of $7.68 came in $0.79 above the $6.8881 consensus estimate, an 11.5% beat. But EPS was down from $8.15 a year ago, when the training services divestiture added a $150 million, or $1.04 per share, benefit. Net income of $1.094 billion also leaned on income tax expense of just $74 million, as the effective tax rate fell to 6.3% from 17.7%.
Sales of $10.876 billion rose 5.1% from $10.351 billion a year ago and 10.1% from the $9.881 billion booked in the first quarter. All four segments grew, led by Aeronautics Systems at $3.519 billion, up 13%, while Defense Systems rose 5%, Space Systems 4% and Mission Systems 3%. Product sales of $8.808 billion did the heavy lifting next to $2.068 billion of service sales.
Management raised 2026 sales guidance to $43.75–$44.25 billion from $43.50–$44.00 billion, a $250 million increase at the midpoint. MTM-adjusted EPS guidance went to $28.60–$29.10 from $27.40–$27.90, a $1.20 raise at the midpoint. Segment operating income guidance of $4.85–$5.00 billion and adjusted free cash flow guidance of $3.10–$3.50 billion were left in place.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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