Q4 2026 · the quarter NOC reports
Sales
PricedIn$12.2B$11.7B – $12.6B
$11.7B$12.2B$12.6B
adjusted EPS
PricedIn$7.89$6.87 – $8.80
$6.87$7.89$8.80
Middlethe forecast80% range1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.
All six models sit between $12.1B and $12.3B for sales and $7.80 to $8.12 for earnings per share. GLM is lowest at $7.80, holding the guidance middle: it takes “12.1 billion (a 9 percent sequential step-up, matching last year's pattern)”. Opus is highest at $12.3B and $8.12, assuming “a smaller but similar beat this year”. Sol's earnings range, $5.80 to $9.50, is widest: its low holds “early-production losses on aircraft, missiles or rocket motors”, its high “persistent tax efficiencies”.
The models expect fourth-quarter sales of about $12.2B, the usual year-end jump that completes the company's unchanged 2026 sales range.
Sales$12.2B$11.7B – $12.6B · +4% on Q4 2025 ($11.7B)
Adjusted EPS$7.89$6.87 – $8.80 · +9% on Q4 2025 ($7.23)
Investment and cash generation
Base case
Capital spending$1.01B
Free cash flow$2.35B
Free cash flow: operating cash flow less capital spending.
Northrop Grumman reported third-quarter sales of $11.1B, up 2.3% on the second quarter, and adjusted earnings per share of $7.89. Through nine months it has booked $31.9B of sales and $21.71 a share. Sales matched our forecast.
The company kept its 2026 sales range and raised its earnings outlook. It says the fourth quarter will again be the biggest of the year, as in 2025, when sales rose 12% from the third quarter to $11.7B.
The models put fourth-quarter sales between $11.7B and $12.6B, with a middle of $12.2B, about 9.3% above the third quarter. Most simply take what is left of the company's range; Opus adds a small beat because last year's fourth quarter came in above the October midpoint.
Earnings per share average $7.89 in the middle, flat on the third quarter: more sales, but a tax rate the models expect to rise to about 17% from the third quarter's 13%. Sol has the widest earnings range, from $5.80 to $9.50, leaving room for a new contract charge or more tax credits.
Earnings per share come from about $1.3B of operating income, an 11% margin, plus pension income, less interest and a tax rate near 17%, over a share count held flat with buybacks paused.
Sales by quarter
Q2 2025$10.4B+1%
Q3 2025$10.4B+4%
Q4 2025$11.7B+10%
Q1 2026$9.9B+4%
Q2 2026$10.9B+5%
Q3 2026$11.1B+7%
Q4 2026$12.2B+4%
Each percent is on the same quarter a year earlier. The last row is the models' forecast.
The quarter forecast, line by line
The lines as the company's statement shows them. The forecast columns are the average of the models, line by line. Sales growth is the change on the same quarter a year earlier. Earnings per share is the headline's: the company's own for the reported quarter, and for a forecast quarter worked out from the averaged lines with the company's adjustments.
What it rests on
- 2026 sales range
- $43.75B to $44.25B, kept unchanged at the third-quarter report
we continue to expect full year sales of 43.75 billion to 44.25 billion.
Third-quarter earnings call - Fourth-quarter seasonality
- Higher fourth-quarter sales expected across the portfolio, as last year
Similar to last year, we expect higher fourth quarter sales throughout the portfolio, driven by production throughput, material volumes, and normal seasonality.
Third-quarter earnings call - Earnings outlook raised
- Up $0.70 a share on stronger segments and a lower tax rate
We are increasing EPS guidance by $0.70, driven by higher segment performance and a lower tax rate, partially offset by higher corporate unallocated cost and interest expense.
Third-quarter earnings call - Tax credits
- Third-quarter tax rate fell on higher research credits
The improvement in the third quarter effective tax rate was driven by the recognition of higher resurged credits.
Third-quarter earnings call - Fourth-quarter capital spending
- Approaching $1.0B, a step up to support the B-21 bomber
So you can think about the fourth quarter CAPEX to be approaching a billion dollars.
Third-quarter earnings call, finance chief
Low and high
Basethe middle forecast
Key assumptions
Sales reach the middle of the unchanged 2026 range, putting the quarter near $12.2B. Nine months total $31.9B and the company reaffirmed its full-year range.4 of 6
- Grok 4.7the fourth quarter has to be about 12.12 billion to hit the middle of that range
- GLM 5.3I take 12.1 billion (a 9 percent sequential step-up, matching last year's pattern) as the middle
- Gemini 4 Argondelivering fourth quarter 2026 revenue of $12.12 billion
- Muse WonderFourth quarter delivers the seasonal step up to the raised 2026 guide
The share count stays flat because buybacks remain paused. The company chose to spend on plants instead of buybacks.3 of 6
- Opus 5.5Shares stay flat because buybacks are paused.
- GPT-6.1 Solfourth-quarter diluted shares stay at 142.4 million
- GLM 5.3I model diluted shares roughly flat at about 142 million through 2028
No new contract charge lands in the quarter. Management says recent cost estimates have been reset.3 of 6
- Grok 4.7I did not put another charge in the middle, because management says those estimates have been reset
- GPT-6.1 SolThe central case assumes no new large bomber charge
- GLM 5.3they do not change my middle, which assumes normal appropriations and no new material charge
The tax rate rises from the third quarter's 13%, toward 15% or more. Third-quarter credits are not carried forward in full.2 of 6
- Opus 5.5I use 15.5 percent for the fourth quarter
- GPT-6.1 SolMy fourth-quarter tax provision is $198 million on $1.327 billion pretax earnings, about 15%.
Capital spending jumps to about $1.0B in the quarter. Management guided fourth-quarter spending approaching a billion dollars.2 of 6
- Opus 5.5I put fourth-quarter capital spending at about $0.95 billion
- GPT-6.1 Solwith $1.075 billion in the fourth quarter this year
If all of this happens
$12.2Bsales
$7.89adjusted EPS
$1.01BCapital spending
$2.35BFree cash flow
Cash walk not supplied by every model.
Lowabout 1 chance in 10 of worse
What the low case assumes
A new charge hits a fixed-price development or early-production program. Rocket motor and missile charges already hit earlier this year.4 of 6
- Opus 5.5a new charge on a fixed-price development or early-production program
- GPT-6.1 SolNew development or early-production losses on aircraft, missiles or rocket motors
- Grok 4.7A new contract loss or cost-growth charge on fixed-price work
- Muse WonderRepeat unfavourable contract cost adjustments
A stopgap budget delays awards and year-end deliveries. The company expects the stopgap to be extended past early December.3 of 6
- Muse WonderA long continuing resolution or shutdown delays new starts and fourth quarter deliveries
- Grok 4.7A continuing resolution or shutdown delays funding and new starts
- Opus 5.5long stopgap budget delaying awards
Tax credits fade, pushing the rate back up. This year's low rate rests on credits that may not repeat.3 of 6
- GPT-6.1 SolLess favorable tax credits and weaker cash conversion
- Grok 4.7The tax rate reverts toward the mid-teens
- Opus 5.5tax rate back near 17 percent
If all of this happens
$11.7Bsales · −4% vs base
$6.87EPS · −13% vs base
Sales would have to fall to about $11.7B, 3.7% below the base and only 5.2% above the third quarter, with earnings per share near $6.87, 13% below the base. That takes year-end deliveries slipping under the stopgap budget, a fresh charge on a fixed-price program and a tax rate without the recent credits. Muse goes lowest on sales, $11.5B, because it has the stopgap delaying fourth-quarter deliveries, not just new starts. Sol goes lowest on earnings, $5.80, because it stacks contract losses with less favorable tax credits.
In 2025 the fourth quarter rose 12% on the third, to $11.7B; a quarter that only matched last year's would sit at the low end.
The six lows run from $11.5B (Muse Wonder) to $11.9B (Opus 5.5).
First signCongress's stopgap decision due in early December, and any contract charge disclosed at the next report.
Highabout 1 chance in 10 of better
What the high case assumes
A richer production mix lifts margins. Mature production programs earned higher margins this year.3 of 6
- Muse WonderStronger production mix
- Opus 5.5stronger margin gains from production mix
- Grok 4.7Faster shift from development contracts to production
Year-end deliveries land above the guidance middle, as in 2025. Last year's fourth quarter beat the October midpoint.2 of 6
- Opus 5.5I assume a smaller but similar beat this year
- Gemini 4 Argonfourth quarter revenue and cash collections typically peak as defense contractors complete annual delivery milestones
Tax credits persist through the quarter. The company says its tax work will continue.2 of 6
- GPT-6.1 SolBetter production margins and persistent tax efficiencies
- Grok 4.7The optimized tax rate persists and no new loss provisions are booked
If all of this happens
$12.6Bsales · +4% vs base
$8.80EPS · +12% vs base
Sales would have to reach about $12.6B, 3.9% above the base and 13% above the third quarter, with earnings per share near $8.80, 12% above the base. That needs strong year-end deliveries and awards, mature production margins holding and tax credits continuing. Sol goes furthest, to $12.9B and $9.50, because it alone counts on both better production margins and persistent tax efficiencies; Muse reaches $9.20 on a production mix that lifts margins above its base.
In 2025 the company finished above the midpoint of its October range, ending the year at $42.0B of sales.
The six highs run from $12.4B (GLM 5.3) to $12.9B (GPT-6.1 Sol).
First signOrders well above sales in the fourth quarter, keeping the full-year ratio above 1.3, shown at the next report.
Watch
Whether Congress extends the stopgap budget past early December, and whether the next report shows sales above $12.6B or below $11.7B, a new contract charge, or a tax rate near 17%.
Q1 2027 · the quarter after
Sales
PricedIn$10.5B$10.0B – $11.0B
$10.0B$10.5B$11.0B
adjusted EPS
PricedIn$6.63$5.88 – $7.38
$5.88$6.63$7.38
Middlethe forecast80% range1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.
The models cluster at $10.3B to $10.6B. Muse, lowest at $10.3B, holds that “first quarter is seasonally lightest”. Sol, highest at $10.6B with GLM, sees “the usual early-year reset” but a milder one. Opus has the lowest earnings middle, $6.51, as it plans to “trim non-operating pension income” in 2027; GLM's $6.77 is highest. Sol's range, $5.25 to $8.10, is widest: its low holds “Less favorable tax credits”, its high “persistent tax efficiencies”.
First-quarter 2027 sales should drop back to about $10.5B, the usual early-year reset, still above the first quarter of 2026.
Sales$10.5B$10.0B – $11.0B · +6% on Q1 2026 ($9.9B)
Adjusted EPS$6.63$5.88 – $7.38 · +8% on Q1 2026 ($6.14)
Investment and cash generation
Capital spending: not supplied by every model
Free cash flow: not supplied by every model
Free cash flow: operating cash flow less capital spending.
The first quarter is the company's lightest. Sales fell 16% from the fourth quarter to $9.9B in early 2026, and 11% to $9.5B in early 2025, as year-end deliveries fade.
The company does not guide single quarters. It has said 2027 sales should grow 5% to 7%, with higher sales in all four segments, and that the length of the stopgap budget could affect the year.
The models put the quarter at $10.0B to $11.0B, with a middle of $10.5B, about 14% below their fourth quarter. Earnings per share average $6.63, down 16%, as the tax rate stays near 16% and pension income falls back from the year-end quarter.
Muse is lowest on sales at $10.3B; Sol and GLM are highest at $10.6B. Opus has the lowest earnings middle, $6.51, a 20% fall, while GLM's $6.77 is highest. Sol's range, $5.25 to $8.10, is the widest.
Earnings per share rest on about $1.1B of operating income at a 10% margin, a tax rate near 16% and a flat share count.
What it rests on
- 2027 sales outlook
- Growth of 5% to 7%, with higher sales in all four segments
For 2027, we project sales growth between 5% and 7%, representing further acceleration from the growth expected this year, with higher sales in all four segments.
Third-quarter earnings call - Stopgap budget
- Company expects the stopgap to be extended past early December
It is unlikely, we believe, that a budget will be passed at that time, so likely that the CR will be further extended.
Investor conference, September 2026 - Backlog turning to sales
- About 35% of backlog expected to become sales within 12 months
So for 2027, we expect about 35% of our backlog to burn down over the next 12 months, another 55 over the following 24 months, leaving the remainder past 36 months.
Third-quarter earnings call - Share count
- Buybacks paused to fund plants; share count held flat
So we made a decision to keep the share count flat and increase our spending on property, plant, and equipment in order to build out the industrial base similar to what I commented in my prepared remarks.
Fourth-quarter 2025 earnings call
Low and high
Basethe middle forecast
Key assumptions
Sales fall back about 14% from the fourth quarter as year-end deliveries fade. The first quarter fell 16% in 2026 and 11% in 2025.3 of 6
- GPT-6.1 SolThe October call supports a large fourth quarter followed by the usual early-year reset.
- Muse Wonderfirst quarter is seasonally lightest
- Gemini 4 Argonfourth quarter revenue and cash collections typically peak as defense contractors complete annual delivery milestones
The year tracks the middle of the 5% to 7% outlook. The company guided growth in all four segments.3 of 6
- Opus 5.52027 sales grow about 6 percent to $46.9 billion
- Grok 4.7Next year sales grow 6 percent, inside the company's 5 to 7 percent outlook
- GLM 5.3In 2027 sales grow about 6 percent
The tax rate settles near 15% to 16%, above this year's credit-aided rate. This year's credits are not assumed to repeat in full.2 of 6
- GPT-6.1 SolCentral future tax rates are about 16%
- GLM 5.3partial normalization to roughly 15 percent
The share count stays flat with no buybacks. Buybacks were paused to fund plant investment.2 of 6
- GPT-6.1 Solthe following quarter at 142.5 million
- Opus 5.5flat share count
Pension income steps down as higher rates raise interest cost. Treasury yields have risen to about 5.09%.1 of 6
- Opus 5.5I trim non-operating pension income to about $620 million in 2027
If all of this happens
$10.5Bsales
$6.63adjusted EPS
Lowabout 1 chance in 10 of worse
What the low case assumes
The stopgap budget runs well into 2027, delaying awards and payments. The company expects the stopgap to be extended past early December.3 of 6
- GLM 5.3Continuing resolution extended well past December, delaying awards and outlays
- Opus 5.5long stopgap budget delaying awards
- Muse WonderDelayed appropriations and contract definitization
A new charge hits fixed-price development work. Rocket motor and missile charges already hit in 2026.2 of 6
- GPT-6.1 SolNew development or early-production losses on aircraft, missiles or rocket motors
- Grok 4.7A new contract loss or cost-growth charge on fixed-price work
Tax credits fade and the rate rises. This year's low rate leaned on credits that may not repeat.2 of 6
- GPT-6.1 SolLess favorable tax credits and weaker cash conversion
- Grok 4.7The tax rate reverts toward the mid-teens
If all of this happens
$10.0Bsales · −5% vs base
$5.88EPS · −11% vs base
Sales would have to come in near $10.0B, 4.6% below the base and 18% below the fourth quarter, with earnings per share near $5.88, 11% below the base. That takes a stopgap budget running into 2027 and slowing new starts, plus a contract charge or fading tax credits. Muse goes lowest on sales, $9.8B, because it adds delayed contract definitization to the funding delay. Sol goes lowest on earnings, $5.25, because it adds less favorable tax credits and weaker cash conversion on top of contract losses.
In early 2026 sales dropped to $9.9B and adjusted earnings per share to $6.14; the low case is close to a repeat of that quarter.
The six lows run from $9.8B (Muse Wonder) to $10.3B (GLM 5.3).
First signCongress extending the stopgap past early December without a full-year defense budget.
Highabout 1 chance in 10 of better
What the high case assumes
A full-year defense budget passes early instead of more stopgaps. The company's programs are funded in the base budget.3 of 6
- Grok 4.7Clean appropriations and a book-to-bill that stays well above one
- Muse WonderAppropriations arrive on time
- Gemini 4 ArgonCongress promptly enacts the $1.1 trillion fiscal year 2027 base defense budget
Munitions and allied orders convert into sales sooner. Ten multi-year missile agreements are in work.3 of 6
- GPT-6.1 SolFaster conversion of missile-component framework agreements
- Grok 4.7Munitions multi-year awards and allied orders convert in 2027
- Muse WonderFaster munitions definitization
Tax credits persist into 2027. The company says tax benefits land over several years.2 of 6
- GPT-6.1 SolBetter production margins and persistent tax efficiencies
- Grok 4.7The optimized tax rate persists and no new loss provisions are booked
If all of this happens
$11.0Bsales · +5% vs base
$7.38EPS · +11% vs base
Sales would need about $11.0B, 4.7% above the base and only 9.7% below the fourth quarter, with earnings per share near $7.38, 11% above the base. That needs a full-year budget passed early, munitions and allied orders converting fast, and tax credits that persist. Sol goes furthest, to $11.2B and $8.10, because it alone combines faster conversion of missile-component agreements with persistent tax efficiencies.
Early 2026 earnings per share of $6.14 sat well below the $7.89 of the third quarter; the high case needs a smaller seasonal drop.
The six highs run from $10.8B (GLM 5.3) to $11.2B (GPT-6.1 Sol).
First signA full-year defense budget passing instead of a stopgap extension in early December.
Watch
Watch early December for the stopgap budget decision, and the next report for the 2027 sales range. A range above 6.2% growth points higher; a stopgap running into 2027 or a fresh charge points toward the $10.0B low.