Northrop Grumman Q4 sales rise 10% as geopolitical tensions drive demand

Overview

• Defense contractor's Q4 sales rose 10% to $11.7 bln, slightly beating expectations

• Q4 net earnings were $1.4 bln, translating to $9.99 per diluted share

• Record backlog of $95.7 bln supports 2026 sales growth outlook

Outlook

• Northrop Grumman projects mid-single digit sales growth for 2026

• Company expects continued strong performance and free cash flow in 2026

Result Drivers

• SEGMENT GROWTH - Aeronautics Systems led Q4 sales growth with an 18% increase, contributing to overall revenue rise

• RECORD BACKLOG - Co's backlog reached a record $95.7 bln, driven by a book-to-bill ratio of 1.10

• MTM BENEFIT - Q4 net earnings were significantly impacted by a $394 mln after-tax MTM benefit related to pension and post-retirement benefits

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 11 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace & defense peer group is "buy"

• Wall Street's median 12-month price target for Northrop Grumman Corp is $692.50, about 4.8% above its January 26 closing price of $660.97

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 22 three months ago

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