Northrop Grumman Q3 2026: Record $109.6B Backlog Powers Guidance Raise
As seen on the 24/7 Wall St. homepage on October 20, 2026.
Backlog hit a record $109.6 billion, and management answered by lifting the 2026 adjusted EPS midpoint to $29.35-$29.75. Revenue landed in line with estimates, but B-21, F-35 and a $2.0 billion Sentinel award booked a 1.5x book-to-bill that funds growth into 2027.
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Northrop Grumman posted GAAP diluted EPS of $7.89 for Q3 2026, beating the consensus estimate and marking a fifth straight quarterly beat. Revenue rose 6.7% year-over-year, in line with Wall Street's expectations.
Aeronautics Systems led the quarter with sales climbing 14%, driven by F-35 production timing, higher B-21 revenue, and increased B-2 sustainment activity. Defense Systems grew 12% on the ongoing ramp of the Sentinel ICBM program.
Backlog hit a record $109.6 billion on a 1.5x book-to-bill ratio, meaning Northrop won $1.50 in new contract value for every dollar of revenue it recognized. That is durable revenue visibility heading into 2027, with new Virginia Class submarine, F-35, and restricted program awards landing in the quarter.
A lower effective tax rate of 13.4% on higher research credits helped lift net income to $1.12 billion. Operating cash flow grew 12% year-over-year and cash nearly doubled, giving management meaningful financial flexibility.
Management raised full-year MTM-adjusted EPS guidance by $0.70 at the midpoint and lifted segment operating income guidance, while maintaining full-year sales guidance. CEO Kathy Warden said the record backlog and portfolio positioning will continue to drive sales and earnings growth into 2027.
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