Northrop Grumman (NOC) reported fourth quarter results that exceeded Wall Street expectations for both earnings and revenue, driven by growth across its defense and aerospace programs.
The company posted adjusted earnings of $7.23 a share for the quarter ended Dec. 31, beating the consensus estimate of $6.96 a share. Revenue rose 10% from a year earlier to $11.7 billion, topping analyst expectations of $11.62 billion.
Net income rose to $1.4 billion, or $9.99 a share, from $1.3 billion, or $8.66 a share, a year earlier.
Northrop Grumman’s (NOC) shares have recovered this year after an earlier pullback tied to renewed scrutiny of the defense sector from President Donald Trump. The stock slid after Trump warned that defense contractors could face limits on dividends, share repurchases and executive pay unless they moved faster to deliver military equipment and improve performance on existing programs.
About a week later, Trump formalized that stance with an executive order aimed at large defense contractors he said were falling short on current government contracts while pursuing new awards. The order calls for tighter oversight of executive compensation and directs the Defense Department to identify underperforming suppliers and develop plans to address delays and cost issues, with the potential for future contracts to restrict buybacks, dividends and incentive pay linked to short-term financial targets.
Backlog climbs to record
For the fourth quarter, Northrop’s (NOC) sales growth was led by higher volumes in aeronautics systems, mission systems, space systems and defense systems. Full year backlog climbed to a record $95.7 billion, supported by a book to bill ratio of 1.10.
Operating income for the quarter increased 17% to $1.3 billion. Earnings, before interest, taxes, depreciation and amortization benefited from higher segment operating income and favorable program performance. The company said ebitda margins remained solid despite program mix and pension-related adjustments.
Chair, Chief Executive Officer and President Kathy Warden said the company’s performance reflected disciplined execution.
“We delivered outstanding results in 2025 through strong performance and a laser focus on our customers’ and stakeholders’ highest priorities,” she said in a statement.
Northrop Grumman (NOC) generated $3.9 billion in operating cash flow during the quarter and $3.2 billion in free cash flow. For 2026, Northrop Grumman (NOC) reaffirmed its outlook for mid-single-digit sales growth and continued strong cash generation, supported by its record backlog and program portfolio.