Northrop Grumman Raises Forecast Following Record $109.6 Billion Backlog

Northrop Grumman reported adjusted earnings per share of $7.89 in the third quarter, compared to expectations of around $7.18, while sales reached $11.122 billion, up 7% from the same period last year.

The company's backlog reached a record high of $109.6 billion, up 20%, with a book-to-bill ratio of nearly 1.5 times, meaning new orders exceeded what the company delivered during the period.

The company raised its full-year adjusted earnings per share guidance for 2026 to a range of $29.35 to $29.75, following strong third-quarter results.

In the Space Systems segment, sales rose 2% to $2.749 billion with a profit margin of 11.3%, indicating continued demand for satellites and space infrastructure.

What do these terms mean?

Adjusted Earnings Per Share (EPS): The profit a company earns per share after excluding extraordinary items, used to compare its performance against analyst expectations.

Backlog: The value of contracts secured by the company that have not yet been executed, serving as an indicator of future revenue.

Book-to-Bill Ratio: The ratio of new orders to sales recorded during the period; any value above 1 indicates that orders are growing faster than deliveries.

Profit Margin: The percentage of revenue remaining after deducting costs, showing the company's efficiency in generating profit from its sales.