Sales increased 5% from a year earlier to $10.9 billion. The company raised its 2026 sales guidance to $43.75 billion to $44.25 billion and lifted MTM-adjusted EPS guidance to $28.60 to $29.10.
“Northrop Grumman achieved a new record backlog, driven by robust global demand for our products,” said Kathy Warden, chair, chief executive officer and president. “We are raising our sales and EPS guidance for the year based on our confidence in our team and the demand for our technologies.”
“As momentum accelerates across our portfolio and the budgets continue to support demand, we remain focused on delivering for our customers with speed and precision, and we are proud of our role in preserving the freedoms we celebrate during our nation’s 250th birthday.” Northrop Grumman said the quarter showed continued demand for its global capabilities.
Defense Systems sales rose 5% to $2.09 billion in the quarter. Organic sales increased 7%, excluding the divested training services business.
The segment’s sales growth was driven mainly by higher volume on Sentinel as the program continues to ramp. Northrop Grumman also cited higher volume across the Integrated Battle Command System portfolio.
Defense Systems operating income fell 38% to $156 million. Its operating margin declined to 7.5% from 12.7%, mainly due to lower net estimate-at-completion adjustments.
The company said the margin decline also reflected the absence of a prior-year $76 million favorable Sentinel adjustment. Northrop Grumman said it continued to invest in its missile prime business during the quarter.
The company projected higher costs to mature production on the Extended Range version of the Advanced Anti-Radiation Guided Missile, known as AARGM-ER. It also cited costs to develop and qualify the Stand-in Attack Weapon, or SiAW.
Those investments led to a $68 million unfavorable estimate-at-completion adjustment on SiAW. Northrop Grumman said the impact was partly offset by a favorable Sentinel adjustment tied to recent achievement of certain contract incentives.
Sentinel was the largest named award in the quarter at $7.6 billion. Other major awards included $4.3 billion for restricted programs, $1.0 billion for F-35, $800 million for Glide Phase Interceptor and $700 million for Multi-role Electronically Scanned Array.
Aeronautics Systems sales rose 13% to $3.52 billion. The increase was driven by higher volume on B-21 and other restricted programs, E-130J TACAMO, B-2, F-35 and E-2 work.
Mission Systems sales increased 3% to $3.25 billion. Northrop Grumman cited higher marine systems volume, timing of materials on F-35 and ramp-up on restricted airborne radar programs.
Space Systems sales rose 4% to $2.75 billion. Growth was supported by higher volume on Glide Phase Interceptor and the Ground-based Midcourse Defense Weapon System.
Northrop Grumman expects 2026 Defense Systems sales in the mid-to-high $8 billion range. It also expects the segment’s operating margin rate to be about 10%.
The second-quarter results show defense demand centered on nuclear modernization, missile defense, integrated battle management and restricted programs. They also show cost pressure in newer missile work as Northrop Grumman funds production maturity and qualification activity.
