Northrop Grumman (NYSE:NOC) fell 2.2% in premarket trading Tuesday after the aerospace and defense company said revenue for the third quarter came in at $10.4 billion, slightly below analyst projections, weighed down by the wind-down of certain space contracts.
Reflecting that slowdown, Northrop trimmed its full-year sales guidance by $350 million to a range of $41.7 billion to $41.9 billion, compared with analysts’ expectations of about $42.2 billion.
Meanwhile, the company lifted its full-year earnings forecast on accelerating work on its Sentinel intercontinental ballistic missile program and gains across key defense segments.
The company posted adjusted earnings of $7.67 a share, up 10% from a year earlier and well ahead of Wall Street’s consensus estimate of $6.46. The results underscore resilient demand for defense hardware as the U.S. military ramps up investments in missile modernization and advanced aerospace systems.
The company now anticipates 2025 adjusted earnings between $25.65 and $26.05 a share, an increase of 65 cents from its previous forecast. Northrop’s (NYSE:NOC) shares have risen 28% this year through Monday’s close, outperforming many defense peers as investors bet on long-term growth tied to modernization programs such as the B-21 Raider stealth bomber and missile defense initiatives.
During the quarter, new contract awards totaled $12.2 billion, bringing the company’s backlog to $91.4 billion, including $4.5 billion in classified programs across its space, mission and aeronautics divisions.
By segment, defense systems sales jumped 14%, driven by the Sentinel program, while mission systems rose 10% and aeronautics advanced 6%. The space systems division, however, saw a 6% decline, reflecting program completions and fewer new awards.
Looking ahead, Northrop (NOC) projects mid-single-digit organic sales growth in 2026, with an operating margin in the low- to mid-11% range, and reiterated expectations for free cash flow between $3.1 billion and $3.5 billion.
As the first major U.S. defense contractor to report third-quarter results, Northrop’s performance sets an early benchmark for the sector. Investors and analysts are expected to seek further clarity on the timing of additional B-21 production contracts and long-term growth drivers when CEO Kathy Warden hosts the company’s earnings call.