Summary
Northrop Grumman posted higher revenue and adjusted profit for the fourth quarter, supported by robust activity in its aeronautics unit and solid demand in mission systems. Elevated geopolitical uncertainty is cited as a key driver of defense spending that benefited the company during the period, though management’s sales outlook for 2026 missed analysts’ expectations.
Northrop Grumman’s quarterly results reflected notable top-line growth, with total revenue for the quarter ended December 31 reaching $11.71 billion, an increase of about 10% from the same period a year earlier. On an adjusted basis, the company reported earnings per share of $7.23, up from $6.39 in the prior-year quarter.
Falls Church, Virginia-based Northrop said its aeronautics segment delivered an 18% increase in sales during the quarter. That business, which includes production of the B-21 Raider long-range strike aircraft as well as fuselages for Lockheed Martin’s F-35, was a primary contributor to the company’s improved quarterly performance.
The company’s mission systems unit also posted strong gains, with sales climbing 10% in the quarter. Management attributed that growth largely to a ramp-up in restricted airborne radar programs and heightened demand for components used in the F-35. The mission systems group focuses on communications and electronic warfare systems, primarily for U.S. defense and intelligence customers.
Other parts of the business expanded as well: sales in Northrop’s defense segment increased 7% and space segment sales rose 5% in the fourth quarter.
Despite the quarter’s gains, Northrop’s forward guidance for fiscal 2026 projected sales of $43.5 billion to $44.0 billion, a range that fell short of the Wall Street consensus of $44.24 billion as compiled by LSEG.
Company results came amid a backdrop of intensifying demand for arms, which the company and peers have linked to geopolitical developments. The firm and others cited escalating tensions in the Middle East and the ongoing Russia-Ukraine conflict as factors boosting orders. The company also noted elevated global tensions tied to policies pursued by U.S. President Donald Trump - including the capture of the Venezuelan president and an aggressive bid to acquire Greenland - which have reportedly increased strains in South America and unsettled NATO relations.
Management did not provide additional detail in the materials referenced here beyond the quarterly segment performances, overall revenue and adjusted EPS, and the 2026 sales range.
Key metrics
- Total quarterly revenue: $11.71 billion, up about 10% year-over-year.
- Adjusted EPS: $7.23, compared with $6.39 a year earlier.
- Segment sales growth: Aeronautics +18%, Mission Systems +10%, Defense +7%, Space +5%.