Abstract
Northrop Grumman will report fourth-quarter results on January 27, 2026 Pre-Market. The preview focuses on expected revenue, margins, and adjusted EPS dynamics alongside segment trends and the latest institutional sentiment.
Market Forecast
Consensus points to Northrop Grumman’s current quarter revenue at USD 11.62 billion, with adjusted EPS at USD 6.96 and EBIT at USD 1.25 billion; year-over-year growth rates are projected at 5.58% for revenue, 9.67% for adjusted EPS, and 12.97% for EBIT. Forecast context suggests stable margins, with gross profit margin expected to hold near recent levels and net profit performance supported by mix and program execution. The main business outlook highlights contributions across Aeronautics Systems, Mission Systems, Space Systems, and Defense Systems, while the most promising segment is Space Systems, supported by robust program funding and recent backlog strength, with segment revenue in the last quarter at USD 2.70 billion and resilient year-over-year momentum.
Last Quarter Review
In the last reported quarter, Northrop Grumman delivered total revenue of USD 10.42 billion, a gross profit margin of 21.37%, GAAP net profit attributable to the parent of USD 1.10 billion with a net profit margin of 10.55%, and adjusted EPS of USD 7.67, with year-over-year growth of 09.57% for adjusted EPS and 04.27% for revenue. A key highlight was operating performance exceeding EBIT expectations, with actual EBIT at USD 1.24 billion versus estimates of USD 1.17 billion, reflecting solid execution across major programs. The main business breakdown was Aeronautics Systems at USD 3.14 billion, Mission Systems at USD 3.09 billion, Space Systems at USD 2.70 billion, and Defense Systems at USD 2.06 billion, illustrating balanced end-market exposure and continued momentum in space-oriented activity.
Current Quarter Outlook
Main Business Trajectory
Northrop Grumman’s core businesses—Aeronautics Systems, Mission Systems, Space Systems, and Defense Systems—enter the quarter with favorable funding visibility and program continuity. Program execution in Aeronautics and Mission Systems supports steady revenue conversion, while a balanced backlog positions the company to navigate delivery schedules and cost control. Management’s recent momentum highlights cost discipline, supply-chain stabilization, and schedule adherence, which together are likely to keep gross margins close to last quarter’s 21.37%. The combination of mix—skewing toward higher-value mission and space programs—and operating leverage should sustain net profit margin around the 10.55% level, with adjusted EPS tracking to consensus at USD 6.96.
Most Promising Segment: Space Systems
Space Systems remains a standout in Northrop Grumman’s portfolio due to ongoing governmental and commercial demand across missile warning, secure communications, and space-resilience initiatives. The last quarter’s USD 2.70 billion segment revenue illustrates the scale and supports expectations for sequential activity tied to key programs and milestones. With prioritized strategic funding and advancing development pipelines, Space Systems is positioned for mid-single to high-single-digit year-over-year growth this quarter, reinforcing company-wide revenue and EPS estimates. The segment’s margin profile benefits from maturing production programs; risk management across material and labor inputs remains essential to preserving EBIT momentum.
Stock Price Drivers This Quarter
Investor attention will likely center on book-to-bill ratios, margin trajectory relative to cost dynamics, and capital deployment signals. Stronger-than-expected bookings—especially in Space Systems—could uplift sentiment, while any slippage in major milestones may pressure the shares. Another focus is adjusted EPS conversion versus cash generation, as consistent free cash flow signals support for capital returns. Management commentary about production ramp timing in Aeronautics and Mission Systems will inform expectations on revenue recognition and the sustainability of gross margin near 21.37%, while net margin sensitivity will hinge on program mix and overhead absorption.
Analyst Opinions
Institutional commentary skews constructive, with the majority expecting an in-line to modest beat on revenue and adjusted EPS driven by backlog execution and segment mix. Analysts highlight upside potential in Space Systems tied to recent awards and stable defense budget dynamics, while acknowledging watchpoints in schedule timing and cost pass-throughs. Well-followed sell-side teams point to the prior quarter’s EBIT outperformance and resilient margin baseline as supportive of the current quarter’s consensus path; the prevailing view leans bullish on operational execution with a balanced risk framework, emphasizing that delivery cadence and cash conversion will be key validation points for shares in the near term.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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