Northrop Grumman Corp
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −2.79%.
Did NOC Beat Earnings? Q3 2025 Results
Northrop Grumman delivered a blowout third quarter in 2025, posting diluted EPS of $7.67 against a consensus estimate of $6.46 — an 18.73% beat — as the defense giant demonstrated that demand for advanced military systems remains firmly intact. Revenue climbed 4.3% year over year to $10.42 billion, with organic growth running even hotter at 5% after stripping out divested training services. The standout driver behind the earnings strength was a combination of Mission Systems and Defense Systems, where favorable EAC adjustments and contract mix pushed segment operating margins sharply higher — Mission Systems alone expanded its margin rate to 16.7% from 13.8%, fueling a 32% surge in operating income. Free cash flow jumped 72% to $1.26 billion, underscoring the operational momentum. Net awards of $12.20 billion produced a healthy 1.17x book-to-bill ratio, keeping the $91.45 billion backlog well-stocked. Looking ahead, Northrop raised its full-year MTM-adjusted EPS guidance by $0.65 to a range of $25.65–$26.05, even as it trimmed its sales outlook modestly to $41.70–$41.90 billion, with CEO Kathy Warden signaling growth across all four business segments in 2026.
- Mission Systems operating margin expansion to 16.7% driven by $68 million favorable EAC adjustment in restricted advanced microelectronics
- Defense Systems 46% operating income growth from higher net EAC adjustments and shift toward fixed-price contracts
- Organic sales growth of 5% excluding divested training services
- Strong demand for armament programs and military ammunition
- F-35 program materials volume increase
- E-130J TACAMO ramp-up contributing $110 million incremental sales
- Improved trade working capital driving 43% increase in operating cash flow
“The momentum we are building in our business drove strong third quarter performance to achieve our financial objectives for mid-single-digit growth, expanding segment margins, and growing cash flows year over year. As a result of this performance and our positive outlook for the remainder of the year, we are once again increasing our 2025 EPS guidance.”
Northrop Grumman CEO, on the earnings call
Forward Guidance & Outlook
Northrop Grumman raised its 2025 MTM-adjusted EPS guidance by $0.65 to a range of $25.65–$26.05 (prior: $25.00–$25.40). Full-year 2025 sales guidance was modestly lowered to $41,700–$41,900 million (prior: $42,050–$42,250 million). Segment operating income is expected at $4,275–$4,375 million. Free cash flow guidance is $3,050–$3,350 million. Segment guidance: Aeronautics Systems sales at high $12 billion with low-to-mid 6% operating margin; Defense Systems at low $8 billion with high 10% margin; Mission Systems at mid $12 billion with mid 14% margin; Space Systems at mid-to-high $10 billion with high 10% margin. The company expects global demand to remain strong and anticipates growth in all four segments next year.
NOC YoY Financials
NOC Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.