Earnings Date | July 21, 2026 (Pre-Market) | Prepared | July 20, 2026 |
Reporting Period | Q2 2026 (ending June 30, 2026) | Last Earnings | April 21, 2026 (Q1 2026) |
Sector ETF Benchmark | ITA (iShares U.S. Aerospace & Defense ETF) | Primary Valuation KPI | Operating EPS (P/E) |
Key Takeaway: The setup is modestly constructive — consensus is a manageable bar after Q1 guidance was reaffirmed rather than raised, but the single biggest swing factor is whether management raises full-year guidance this time, particularly on EPS, where the Street sits above the midpoint of the company's own range.
Heading into Q2 2026, NOC faces a bar that is achievable but not easy: consensus expects revenue of ~$10.82B (+4.5% YoY) and operating EPS of ~$6.81, both modestly above the implied quarterly run-rate of full-year guidance. Management reaffirmed full-year guidance on the Q1 call despite a solid beat, which disappointed investors and drove a ~7% intraday decline on April 21 — that reset has left the bar more reasonable heading into Q2. Estimate revisions have been essentially flat since the Q1 print, with Q2 operating EPS drifting from $6.81 to $6.81 and full-year EPS holding near $27.91, suggesting the Street has largely digested the guidance reaffirmation and is not pricing in a raise. The stock has underperformed ITA and the S&P 500 materially since last earnings (NOC −20% vs. ITA roughly flat and SPY +5% since April 21), driven almost entirely by multiple compression rather than estimate cuts — the NTM P/E has contracted from ~23.6x to ~17.9x — meaning the stock is pricing in execution risk, not a beat. The key wildcard is the F/A-XX downselect, expected in Q3 per management's own guidance; any signal on timing or NOC's competitive positioning could move the stock more than the quarterly print itself. Peer commentary from RTX, LMT, LHX, and HII at the May 2026 Bernstein conference is uniformly bullish on defense demand, munitions replenishment, and international growth — all of which read positively for NOC's Defense Systems and Mission Systems segments. The Space segment remains the key execution watch item after the GEM 63XL EAC charge in Q1.
Key Takeaway: Consensus is a manageable bar on revenue but the EPS bar is slightly above the implied quarterly run-rate of full-year guidance; segment operating margin is the bigger swing factor — Q1 came in at 10.8% and management guided for improvement through the year, so a Q2 print at or above 11.2% would be the key beat signal.
KPI | Q1 2026 Actual | Q2 2025 Actual | Q2 2026 Consensus Est. | YoY Change | FY2026 Guidance | Cons. vs. Guidance |
Total Sales ($B) | $9.88B | $10.35B | $10.82B | +4.5% | $43.5B–$44.0B (mid $43.75B) | ~+1.0% vs. midpoint implied Q2 |
Operating EPS (Diluted) | $6.14 | $8.15 | $6.81 | −16.4% | $27.40–$27.90 (mid $27.65) | ~+1.7% vs. midpoint implied Q2 |
Segment Operating Margin (%) | 10.85% | 11.78% | 11.22% | −56 bps | Low-to-mid 11% (FY) | ~In-line |
Free Cash Flow ($B) | ($1.82B) | $0.64B | $1.14B | +79% | $3.1B–$3.5B (FY) | N/A — quarterly FCF not guided |
Backlog ($B) | $95.6B | $89.7B | $94.6B | +5.4% | N/A — not guided | N/A |
Sales — Aeronautics Systems ($B) | $3.28B | $3.11B | $3.28B | +5.4% | Mid $13B (FY) | ~In-line |
Sales — Defense Systems ($B) | $1.90B | $1.99B | $2.16B | +8.5% | Mid-to-high $8B (FY) | ~In-line |
Sales — Mission Systems ($B) | $2.86B | $3.16B | $3.22B | +1.9% | High $12B (FY) | ~In-line |
Sales — Space Systems ($B) | $2.48B | $2.65B | $2.75B | +3.8% | ~$11B (FY) | ~In-line |
Sources: Visible Alpha Consensus and Actuals Data — Sales, Operating EPS, Free Cash Flow, Backlog, Segment Sales, Segment Operating Margin. Q1 2026 actuals and Q2 2025 actuals from Visible Alpha. Q2 2026 consensus as of July 20, 2026. FY2026 guidance from Q1 2026 earnings release (April 21, 2026).
Quarter | Revenue Reported ($B) | Revenue Consensus ($B) | Rev. Surprise % | Op. EPS Reported | Op. EPS Consensus | EPS Surprise % | Result |
Q1 2026 | $9.88B | $9.76B | +1.2% | $6.14 | $6.07 | +1.2% | Beat / Beat |
Q4 2025 | $11.71B | $11.63B | +0.7% | $7.23 | $6.98 | +3.6% | Beat / Beat |
Q3 2025 | $10.42B | $10.72B | −2.8% | $7.67 | $6.44 | +19.0% | Miss / Beat |
Q2 2025 | $10.35B | $10.05B | +3.0% | $8.15 | $6.90 | +18.1% | Beat / Beat |
Q1 2025 | $9.47B | $9.93B | −4.6% | $3.32 | $6.27 | −47.1% | Miss / Miss (B-21 charge) |
Q4 2024 | $10.69B | $10.98B | −2.6% | $6.39 | $6.46 | −1.1% | Miss / Miss |
Q3 2024 | $10.00B | $10.21B | −2.1% | $7.00 | $6.08 | +15.2% | Miss / Beat |
Q2 2024 | $10.22B | N/A — pre-VA window | N/A | N/A | N/A | N/A | N/A |
Source: Visible Alpha Consensus and Actuals Data. Note: Q1 2025 EPS miss reflects the $477M B-21 loss provision; Q2 2025 and Q3 2025 EPS beats were driven by favorable EAC adjustments and mix. Revenue beats have been inconsistent — NOC has missed revenue consensus in 4 of the last 7 reported quarters — but EPS has beaten in 5 of 7, suggesting margin execution is more reliable than top-line delivery.
Key Takeaway: Full-year guidance was reaffirmed unchanged on the Q1 call; no post-earnings guidance revision has been issued. The only notable post-Q1 development was a ~7% dividend increase announced in May 2026, signaling management confidence in operating cash generation even during the elevated CapEx investment period.
Metric | Initial Guidance (Q1 2026 Call, Apr 21) | Revised Guidance | Current Consensus | Note |
FY2026 Sales | $43.5B – $44.0B | — | $44.02B | Unchanged; consensus sits at top of range |
FY2026 Segment Operating Income | $4.85B – $5.00B | — | Implied ~$4.96B (11.26% margin on $44.02B) | Unchanged; consensus near top of range |
FY2026 MTM-Adjusted EPS | $27.40 – $27.90 | — | $27.91 | Unchanged; consensus ~$0.01 above top of range — slight tension |
FY2026 Free Cash Flow | $3.1B – $3.5B | — | $3.29B | Unchanged; consensus near midpoint |
FY2026 CapEx | $1.85B (raised from $1.65B on Q1 call) | — | N/A — not tracked in VA | ↑ Raised on Q1 call; +$200M for B-21 production capacity investment |
Aeronautics Systems Sales | Mid $13B; margin low-to-mid 9% | — | $13.71B; 11.2% margin (FY) | Unchanged; consensus margin above guidance — watch |
Defense Systems Sales | Mid-to-high $8B; margin ~10% | — | $8.79B | Unchanged; Sentinel ramp driving upside risk |
Mission Systems Sales | High $12B; margin high 14% | — | $12.91B | Unchanged; margin guidance conservative vs. Q1 actual of 15.1% |
Space Systems Sales | ~$11B; margin ~11% | — | $11.03B | Unchanged; GEM 63XL charge in Q1 was one-time per management |
Quarterly Dividend | N/A (not guided on Q1 call) | ~7% increase (May 2026) | N/A | ↑ Board raised dividend ~7% in May 2026; tied to operating cash growth YoY |
Source: Q1 2026 Earnings Release and Earnings Call Transcript (April 21, 2026); Visible Alpha Consensus and Actuals Data for current consensus figures. Dividend increase sourced from company commentary evolution knowledge base.
Key Takeaway: Estimates for Q2 2026 and FY2026 have been remarkably stable since the Q1 print — Q2 EPS has drifted only −0.1% and FY EPS only +0.1% since the post-Q1 baseline, confirming the Street has accepted the guidance reaffirmation and is not pricing in a raise. The slight upward drift in FY revenue consensus (now at the top of the guidance range) suggests analysts are incrementally more confident on volume, but the EPS consensus sitting just above the top of guidance creates a small tension that management will need to address.
KPI (Period) | Est. ~Apr 28 (Post-Q1 Baseline) | Current Consensus (Jul 20) | Estimate Δ (%) | Initial Guidance (Q1 Call) | Current Guidance | Guidance Δ | Cons. vs. Guidance (%) |
Revenue — Q2 2026 | $10.799B | $10.820B | +0.2% | High single-digit sequential growth from Q1 ($9.88B) | Unchanged | — | ~+9.5% seq. — in-line with guidance |
Revenue — FY2026 | $43.952B | $44.018B | +0.2% | $43.5B – $44.0B | Unchanged | — | +0.0% vs. top of range |
Op. EPS — Q2 2026 | $6.807 | $6.812 | +0.1% | N/A — quarterly EPS not guided | Unchanged | — | N/A |
Op. EPS — FY2026 | $27.876 | $27.913 | +0.1% | $27.40 – $27.90 | Unchanged | — | +0.0% vs. top of range |
Source: Visible Alpha Consensus and Actuals Data (revision history table, weekly frequency, April 24 – July 20, 2026). Post-Q1 baseline taken as of April 24, 2026 (approximately 3 trading days post-print). Guidance from Q1 2026 Earnings Call (April 21, 2026). The near-zero estimate drift since Q1 is notable: it means the Street is not building in a guidance raise, and any raise on the Q2 call would be a positive catalyst. Conversely, if management again reaffirms without raising, the stock reaction could be muted-to-negative as it was in April.
Key Takeaway: NOC has dramatically underperformed both ITA and the S&P 500 since Q1 earnings — down ~20% vs. ITA roughly flat and SPY +5% — driven almost entirely by multiple compression (NTM P/E from ~23.6x to ~17.9x) rather than estimate cuts, suggesting the market is pricing in execution risk and the absence of a guidance raise rather than a fundamental deterioration.
NOC closed at $656.98 on April 20, 2026 (the day before Q1 earnings). By July 21, 2026 (the day of Q2 earnings), the stock had declined to approximately $524, a loss of ~20.3% from the pre-Q1 close. Over the same period, ITA (iShares U.S. Aerospace & Defense ETF) was roughly flat to slightly positive, and SPY gained approximately +5%. The stock's worst single-day move was the Q1 earnings reaction on April 21 (−7.3% intraday), driven by the absence of a guidance raise despite a beat. A secondary leg lower occurred in mid-to-late June (stock fell from ~$551 to ~$499 between June 17 and June 25), coinciding with broader defense sector rotation and no company-specific catalyst. The stock partially recovered in early July, reaching ~$549 on July 2, before pulling back again to the low $520s. The NTM EV/EBITDA multiple compressed from ~17.1x (6 months ago) to ~13.8x currently, consistent with the P/E compression narrative. At ~17.9x NTM P/E, NOC trades at a meaningful discount to its 3-year average of ~20x+, suggesting the stock has room to re-rate if Q2 delivers a guidance raise.
Source: Stock Price Data (Yahoo Finance). Sector ETF: ITA (iShares U.S. Aerospace & Defense ETF) — appropriate for NOC's defense prime sub-sector. Stock performance decomposition data from internal analytics.
Date | NOC (Indexed) | ITA (Indexed) | SPY (Indexed) |
Apr 21 (Earnings Day) | 100.0 | 100.0 | 100.0 |
Apr 30 | 94.8 | 98.0 | 102.1 |
May 29 | 92.2 | 105.5 | 107.4 |
Jun 17 | 90.1 | 108.8 | 105.2 |
Jun 30 | 83.3 | 108.7 | 106.1 |
Jul 17 (Latest) | 85.4 | 103.4 | 105.6 |
Note: Indexed to 100 at April 21, 2026 close ($611.13 for NOC, $223.09 for ITA, $704.08 for SPY). Source: Stock Price Data (Yahoo Finance). Key events: Q1 earnings reaction −7.3% on Apr 21; Bernstein Conference May 27–29 (no material stock move); secondary leg lower Jun 17–Jun 25 (no company-specific catalyst); partial recovery Jul 1–2 on broader defense sector strength.
Key Takeaway: The most important development since Q1 earnings is the finalized B-21 production rate increase agreement (+25% annual rate) with associated $2.5B company-funded CapEx commitment — this is the single largest strategic disclosure in years and sets up a multi-year revenue and margin inflection, but also creates near-term FCF headwinds that the market is still digesting.
Key Takeaway: Insider activity since Q1 earnings is minimal — only one transaction was filed, a small 10b5-1 planned sale by a director. No open-market buys or discretionary sales; no notable clustering or unusual activity.
Name | Title | Transaction Type | Shares | Date | Note |
Mark A. Welsh III | Director | 10b5-1 Planned Sale | 95 shares | May 4, 2026 | Pre-planned 10b5-1 sale; routine/obligation-driven. Retained 4,121 shares post-transaction. |
Source: SEC Form 4 Filings Database (Insider Transaction Data). Window: April 21 – July 20, 2026. Open-market buys (code P) and open-market sales (code S) only, plus 10b5-1 plan disclosures. The single transaction filed was a 10b5-1 planned sale by Director Mark A. Welsh III on May 4, 2026 (filed May 5, 2026). No open-market buys or discretionary sales were filed by any executive officer or director during the period. The absence of insider buying at a ~20% lower stock price than pre-Q1 levels is notable but not alarming given the 10b5-1 plan structure that governs most director sales.
Key Takeaway: Peer commentary from the May 2026 Bernstein conference and RTX's July 9 preliminary results is uniformly bullish on defense demand, munitions replenishment, international growth, and margin expansion — all of which read positively for NOC's Q2 2026 print and full-year outlook. The most actionable read-throughs are: (1) RTX's Q2 preliminary results confirming strong defense demand into the quarter; (2) LMT's explicit confirmation that NOC is qualifying as a PAC-3 SRM second source; and (3) broad peer consensus that the defense budget environment is stronger than expected.
Note: All commentary below was delivered between May 21 and July 9, 2026 (within the past 60 days as of July 20, 2026) and addresses Q2 2026 current-quarter conditions or forward-looking outlook — not retrospective commentary about prior-quarter results.
RTX pre-announced Q2 2026 results on July 9, 2026, providing the most timely and direct read-through for NOC's Q2 print. CEO Christopher Calio expressed "strong conviction around the demand on both sides of our business, commercial and defense," noting the macro on defense "continues to be really strong." RTX highlighted "replenishment opportunities in defense" driven by conflicts including Ukraine and Operation Epic Fury, and stated the defense budget — even at the base $1.15T level — "portends for continued demand in defense both this year and in future years." RTX also noted "general bipartisan support for the need for larger munitions" and confirmed demand for high-end systems like Patriot, Tomahawk, and Standard Missile has been "exceptionally strong."
NOC Read-Through: RTX's Q2 preliminary results confirm that defense demand remained robust through the quarter ending June 30, 2026. The munitions replenishment theme directly benefits NOC's Defense Systems segment (solid rocket motors, IBCS, tactical missiles). RTX's framework agreements for 7-year firm demand on critical munitions — expected to drive production rates "2 to 4x" current levels — validate NOC's own SRM capacity investment thesis. RTX also identified "rocket motors" as a "constrained value stream" requiring additional investment and capable parties, which is a direct positive for NOC's SRM business as a qualified second-source supplier.
Source: RTX Q2 2026 Preliminary Results and Strategic Update transcript (July 9, 2026); RTX Bernstein Strategic Decisions Conference transcript (May 29, 2026).
LMT CEO James Taiclet provided extensive forward-looking commentary on the defense demand environment. Most directly relevant to NOC: Taiclet explicitly confirmed that "Northrop Grumman is qualifying to be a PAC-3 solid rocket motor provider," describing this as "a second source for us." LMT's Missiles and Fire Control segment was described as their "highest growth business right now," with plans to "triple PAC-3 production" and "quadruple THAAD production." A $4.5B undefinitized contract for Patriot was signed in late May, with the full 7-year contract potentially in place "as early as the next 2 or 3 months." LMT's financial profile assumes PAC-3, Patriot, and THAAD awards in 2026 and a PrSM award in 2027, with MFC projected to achieve "mid-teens top line growth" over the next 5 years.
NOC Read-Through: The PAC-3 second-source qualification is a direct incremental revenue opportunity for NOC's Defense Systems segment. The broader munitions demand surge (PAC-3 3x, THAAD 4x) validates NOC's $2B+ SRM and munitions capacity investment. LMT's emphasis on supply chain resilience and the need for "2 to 3 sources for every major component" suggests NOC's second-source qualification efforts across multiple missile types will generate sustained order flow. The 7-year multi-year contract structure with inflation escalators and prepayment mechanisms, if adopted broadly, would improve NOC's FCF predictability.
Source: LMT Bernstein Strategic Decisions Conference transcript (May 27, 2026).
L3Harris CEO Christopher Kubasik provided some of the most bullish forward-looking commentary of the conference. He projected the base defense budget will "definitely be over a trillion dollars" and the total (including reconciliation) will be "between $1.1 trillion and $1.5 trillion." Kubasik stated that "capacity is the new capability," emphasizing the national imperative to "ramp up and make more quickly." On solid rocket motors, L3Harris is working "24/7" on a "wartime footing" and making a "$3 billion investment" to "double, triple or quadruple production," with a new PAC-3 Patriot building in Camden, Arkansas expected to open in July 2027. L3Harris expects its missile segment to grow "20% between now and the 2028 framework." On unmanned systems, Kubasik stated the industry is "nearing that inflection point in unmanned, where it's going to be more tangible part of the Navy fleet," with "a lot of opportunities" in both domestic and international competitions.
NOC Read-Through: The SRM capacity investment theme is directly additive to NOC's Defense Systems narrative — if L3Harris is investing $3B to expand SRM capacity, the demand signal is real and sustained. The unmanned inflection point commentary is a direct positive for NOC's autonomous systems portfolio (Global Hawk, Triton, YFQ-48A, MUX TACAIR). Kubasik's emphasis on bipartisan support for "defensive interceptors" and the need to replenish inventories validates NOC's missile defense business (~10% of revenue). The supply chain challenge commentary (single-source dependencies, need for second and third sources) reinforces NOC's strategic value as a qualified second-source supplier across multiple missile types.
Source: LHX Bernstein Strategic Decisions Conference transcript (May 27, 2026).
HII CEO Christopher Kastner highlighted that the Trump administration's defense budget proposal is "$1.5 trillion" and that HII's programs are "in the base budget," protecting their "6% revenue growth, midterm revenue growth." Kastner noted "big increases" in the budget for Virginia-class and Columbia-class submarines and amphibious ships. On unmanned systems, Kastner stated that "unmanned is probably the most interesting thing right now when you look at the budget," with the industry "nearing that inflection point in unmanned, where it's going to be more tangible part of the Navy fleet." He highlighted "a lot of opportunities" in both domestic and international unmanned surface competitions. On margins, Kastner expects Block 6 contracts to be "much more attractive" and anticipates both shipyards reaching "9% to 10% and maybe even north of that" based on new contracts.
NOC Read-Through: HII's confirmation of "big increases" for Virginia-class and Columbia-class programs is a positive read-through for NOC's Space and Mission Systems segments, which supply propulsion systems, missile tubes, and electronics for these platforms. The unmanned inflection point commentary reinforces the NOC autonomous systems growth thesis. HII's improving margin trajectory on new contracts suggests the broader defense contracting environment is becoming more favorable for prime contractors, which should benefit NOC's own margin expansion path.
Source: HII Bernstein Strategic Decisions Conference transcript (May 28, 2026).
Boeing CEO Robert Ortberg provided forward-looking commentary on the defense environment that is relevant to NOC, particularly given Boeing's role as the other finalist in the F/A-XX competition. Ortberg stated the defense budget is "bigger than we expected it was going to be last year" and expressed confidence it will be "a pretty robust budget." On the weapons business, Ortberg stated demand is "through the roof" and the industry is shifting from "how many can we get under order" to "how many can we build." He noted recent meetings at the Pentagon where "CEOs have all met with POTUS on the need to ramp up our capability in the weapons market." On program execution, Ortberg emphasized a renewed discipline in defense contracting, with Boeing walking away from jobs with "too much risk for the fixed price contract type" — a posture that suggests the F/A-XX competition will be priced more carefully by both finalists. On national security space, Ortberg stated the business has "good budget support" and "many aspects... have application to the Golden Dome."
NOC Read-Through: Boeing's weapons demand commentary ("through the roof") is a direct positive for NOC's Defense Systems segment. Boeing's more disciplined approach to fixed-price contracts is relevant context for the F/A-XX competition — if Boeing is being more selective on risk, it may price the F/A-XX bid more conservatively, potentially improving NOC's competitive position on economics. Boeing's positive commentary on national security space and Golden Dome applicability validates NOC's own Golden Dome positioning. The high operational tempo commentary ("our platforms are very much in the fight") drives sustainment demand across NOC's portfolio.
Source: BA Bernstein Strategic Decisions Conference transcript (May 27, 2026).
Theme | Peer Signal | NOC Implication | Direction |
Defense Budget | RTX, LMT, LHX, HII, BA all confirm budget stronger than expected; $1.1T–$1.5T range | Supports NOC revenue guidance and potential upside; reduces budget risk | Positive |
Munitions / SRM Demand | RTX: 2–4x production ramp; LHX: $3B investment, 20% missile growth; LMT: PAC-3 3x, THAAD 4x; BA: demand "through the roof" | Direct positive for NOC Defense Systems (SRM, IBCS, tactical missiles); validates capacity investment | Positive |
NOC PAC-3 Second Source | LMT explicitly confirmed NOC qualifying as PAC-3 SRM second source | Incremental Defense Systems revenue; validates SRM investment thesis | Positive |
International Demand | RTX: 48% backlog international; LMT: 30% international, "huge line" for PAC-3/THAAD; LHX: "hundreds of millions" in European deals | Validates NOC's international growth thesis; IBCS, G/ATOR, counter-UAS pipeline | Positive |
Unmanned Systems | HII: "nearing inflection point" in unmanned; LHX: "a lot of opportunities" in domestic and international unmanned | Positive for NOC autonomous systems (Global Hawk, Triton, YFQ-48A, MUX TACAIR) | Positive |
Golden Dome | BA: national security space has "application to Golden Dome"; HII: broadly supported in government | NOC selected for C2 team and space-based interceptors; emerging revenue not in guidance | Positive |
Margin / Contract Discipline | BA: walking away from risky fixed-price contracts; RTX: margin expansion expected; HII: 9–10%+ margins on new contracts | Favorable contracting environment; supports NOC margin expansion path | Positive |
Supply Chain Constraints | RTX: rocket motors "constrained"; LHX: single-source dependencies a challenge; HII: castings/forgings bottleneck | Risk to NOC's ability to ramp Defense Systems faster than guided; watch SRM supplier capacity | Watch |
F/A-XX Timing | BA (Ortberg): "government looks like they're going to make a decision on F/A-XX yet this year" | Confirms Q3 downselect timeline; binary event for NOC (win = significant upside to guidance) | Watch |
Sources: RTX Q2 2026 Preliminary Results and Strategic Update (July 9, 2026); LMT, LHX, BA Bernstein Strategic Decisions Conference transcripts (May 27, 2026); HII Bernstein Strategic Decisions Conference transcript (May 28, 2026); RTX Bernstein Strategic Decisions Conference transcript (May 29, 2026). All commentary addresses Q2 2026 current-quarter conditions or forward-looking outlook; retrospective prior-quarter commentary excluded.