Northrop Grumman Corp. reported fourth‑quarter 2025 revenue of $11.71 billion, up 9.6% from $10.73 billion a year earlier, and GAAP earnings per share of $9.99, a $2.29 beat over the consensus estimate of $7.70. The company’s adjusted EPS of $7.23 also surpassed the $7.00 estimate by $0.23, a 3.3% gain. The earnings beat was driven by strong demand in the company’s core defense businesses and disciplined cost management that helped offset a one‑time $477 million loss provision related to the B‑21 bomber program.
The Aeronautics segment posted sales of $4.12 billion, up 18% YoY, while Mission Systems grew 10% to $3.45 billion. These gains were supported by higher volumes of strategic deterrence and advanced microelectronics contracts, including the expansion of three U.S. government‑certified semiconductor factories that began production in September 2025. The Space Systems and Defense segments also contributed modest growth, but the overall operating margin for the quarter was 11.2%, slightly below the 11.5% margin recorded in Q4 2024, reflecting the impact of the B‑21 loss provision and higher investment in research and development.
Northrop Grumman guided 2026 revenue to $43.5 billion–$44.0 billion, a mid‑single‑digit increase from the $42.8 billion forecast issued in the prior year. Adjusted EPS guidance of $27.40–$27.90 per share falls short of the consensus estimate of $28.85, and free‑cash‑flow guidance of $4.5 billion–$5.0 billion is below the $5.2 billion expected by analysts. Management cited a cautious outlook for defense spending and the need to balance investment in new programs with cost discipline, while emphasizing confidence in a record backlog of $95.7 billion that underpins the guidance.
Pre‑market trading reflected investor concern over the lower 2026 guidance, with the stock falling 1.7% to 2% despite the earnings beat. Analysts noted that the guidance, particularly the EPS forecast, was below consensus, creating a valuation overhang that outweighed the quarterly performance. The market reaction underscores the importance investors place on forward‑looking metrics when evaluating a defense contractor’s long‑term prospects.
Chair, CEO and President Kathy Warden said the quarter “demonstrated our ability to deliver on high‑priority programs while maintaining disciplined cost control.” She added that the company’s “record backlog supports a confident outlook for 2026, with mid‑single‑digit sales growth expected as demand for strategic deterrence and advanced microelectronics continues to rise.”
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