Northrop Grumman Corporation 8-K
PositiveEarningsGuidance raised
Sentinel and restricted-program awards lift backlog to a record; FY2026 sales and MTM-adjusted EPS guidance raised
Filed 2026-07-21 06:45 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q2 2026 results with increased FY2026 sales and MTM-adjusted EPS guidance. Sales grew 5% Y/Y, while operating income and net earnings declined, in part because Q2 2025 included a gain on the sale of the training services business. Net awards lifted backlog to a company record; the company raised sales and MTM-adjusted EPS guidance and reaffirmed segment operating income and adjusted free cash flow guidance.
Key Figures
| Metric | Q2 2026 | Q2 2025 | Y/Y |
|---|---|---|---|
| Sales | $10.9B | $10.4B | 5% |
| Operating income | $1.10B | $1.43B | (23)% |
| Net earnings | $1.09B | $1.17B | (7)% |
| Diluted EPS | $7.68 | $8.15 | (6)% |
| Operating cash flow | $1.28B | $868M | 47% |
| Adjusted free cash flow, non-GAAP | $978M | $637M | 54% |
- Operating income fell partly because Q2 2025 included a $231M gain on the training services divestiture; lower segment operating income and a lower FAS/CAS operating adjustment also contributed. Net earnings were partly supported by lower income tax expense, reflecting a lower effective tax rate.
- Net awards were $20.0B and backlog reached $104.7B, up 9% from $95.7B at 12/31/2025. Major awards included $7.6B for Sentinel and $4.3B for restricted programs.
- At 6/30/2026, cash was $2.31B vs $4.40B at 12/31/2025; long-term debt, net of current portion, was $14.4B vs $15.2B. Six-month share repurchases were $68M vs $891M; weighted-average diluted shares were down 1% Y/Y to 142.4M.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Sales | FY2026 | $43.75B-$44.25B | $43.5B-$44B | Raised |
| Segment operating income, non-GAAP | FY2026 | $4.85B-$5B | — | Reaffirmed |
| MTM-adjusted EPS, non-GAAP | FY2026 | $28.60-$29.10 | $27.40-$27.90 | Raised |
| Adjusted free cash flow, non-GAAP | FY2026 | $3.1B-$3.5B | — | Reaffirmed |
| Aeronautics Systems sales | FY2026 | ≈$14B | Mid $13B | Raised |
| Aeronautics Systems operating margin | FY2026 | Mid to High 9% | Low to Mid 9% | Raised |
| Defense Systems sales | FY2026 | Mid to High $8B | — | — |
| Defense Systems operating margin | FY2026 | ≈10% | — | — |
| Mission Systems sales | FY2026 | High $12B | — | — |
| Mission Systems operating margin | FY2026 | ≈15% | High 14% | Raised |
| Space Systems sales | FY2026 | ≈$11B | ≈$11B | Reaffirmed |
| Space Systems operating margin | FY2026 | Low 10% | — | — |
| Intersegment eliminations sales | FY2026 | ≈$(2.7)B | ≈$(2.4)B | Lowered |
| Intersegment eliminations operating margin | FY2026 | Mid 13% | High 13% | Lowered |
Investor Takeaways
- Watch FY2026 sales and MTM-adjusted EPS against the raised ranges, alongside execution on the record backlog and the company’s reaffirmed operating income and adjusted free cash flow outlook.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3