Northrop Grumman Corporation NOC is scheduled to release third-quarter 2026 results on Oct. 20, before market open. The company delivered an earnings surprise of 12.3% in the last reported quarter.
Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Key Factors Likely to Influence NOC’s Q3 Results
Northrop Grumman’s third-quarter earnings are expected to have benefited from solid demand, supported by a strong backlog. It offers strong visibility into near-term revenue streams.
Continued geopolitical tensions, increasing U.S. and allied defense spending, and demand for advanced aircraft, missile defense, space systems, and autonomous technologies should have continued to support new contract awards and program execution during the third quarter.
Management anticipated mid- to high-single-digit year-over-year sales growth in the third quarter. Northrop Grumman raised its 2026 sales guidance to $43.75-$44.25 billion from $43.5-$44 billion previously, reflecting confidence in stronger second-half activity. Higher production volumes across all four business segments could have supported third-quarter revenues. However, achieving the target depends on program execution, delivery schedules, and the availability of materials and labor.
Aeronautics Systems is positioned to have benefited from higher B-21 Raider production, alongside increased activity on the E-130J TACAMO, B-2 and F-35 programs. The agreement to expand B-21 production capacity could have supported further growth as the program ramps up. Management also said the U.S. Air Force was evaluating whether to accelerate production into a larger program of record, potentially creating a longer-term opportunity beyond the existing plan.
Defense Systems could have benefited from rising ammunition sales, increased production activity across its weapons portfolio, continued Sentinel ramp-up, and growth in the Integrated Battle Command System. Management expects second-half revenues to increase more than $700 million, supported by these programs, and projects margins above 11% during the period, excluding the impact of missile development investments.
Despite receiving significant new awards, Sentinel remains a complex program with a history of major cost increases. Northrop Grumman continues to execute the engineering and manufacturing development phase under a cost-type contract, while the production and deployment phases remain subject to revised baselines and future negotiations. Its future financial performance remains sensitive to estimated costs, program milestones and contract terms.
NOC’s Q3 Expectations
The Zacks Consensus Estimate for earnings is pegged at $7.26 per share, indicating a year-over-year decrease of 5.4%.
The Zacks Consensus Estimate for revenues is pinned at $11.06 billion, implying a year-over-year improvement of 6.1%.
What the Zacks Model Unveils
Our proven model does not predict an earnings beat for Northrop Grumman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
Northrop Grumman Corporation Price and Consensus
Northrop Grumman Corporation price-consensus-chart | Northrop Grumman Corporation Quote
Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, the company carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
Stocks to Consider
Investors may consider the following players from the same industry, as these, too, have the right combination of elements to post an earnings beat this reporting cycle.
Lockheed Martin LMT is expected to come up with an earnings beat when it reports third-quarter results on Oct. 22, before market open. It has an Earnings ESP of +0.27% and a Zacks Rank #2 at present.
The consensus estimate for LMT’s third-quarter sales implies an improvement of 9.4% from the year-ago quarter’s level. The Zacks Consensus Estimate for earnings is pinned at $7.48 per share, indicating year-over-year growth of 7.6%.
Howmet Aerospace HWM is likely to come up with an earnings beat when it announces third-quarter results on Oct. 29, before market open. It has an Earnings ESP of +0.21% and a Zacks Rank #1 at present.
The consensus estimate for HWM’s third-quarter sales suggests an improvement of 24% from the year-ago quarter’s reported numbers. The company delivered an average earnings surprise of 6.9% for the trailing four quarters.
L3Harris Technologies LHX is likely to come up with an earnings beat when it announces third-quarter results on Oct. 29, before market open. It has an Earnings ESP of +0.76% and a Zacks Rank #3 at present.
The consensus estimate for LHX’s third-quarter sales suggests an improvement of 4.3% from the year-ago quarter’s reported numbers. The company delivered an average earnings surprise of 5.3% for the trailing four quarters.
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Northrop Grumman Corporation (NOC): Free Stock Analysis Report
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Howmet Aerospace Inc. (HWM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).