Updated Version 2 - Northrop raises its 2026 profit forecast due to strong defense demand and a record backlog of orders

The second paragraph updates the stock price movement

Mike Stone/Aatreyee Dasgupta

Reuters, October 20 - Northrop Grumman Corporation (NOC.N) raised its annual profit forecast on Tuesday, after strong demand for military aircraft, missiles, and defense projects not only helped its third-quarter profit surpass Wall Street expectations, but also drove its order backlog to a record high.

The stock of the Virginia-based defense contractor headquartered in West Falls Church rose 5.6% in early trading.

Northrop Grumman produces the B-21 "Raider" bomber and parts for the F-35 fighter jet, and has benefited from increased military spending by the United States and its allies amid rising geopolitical tensions.

"I am confident that our record backlog, well-positioned business mix and investments, along with industry-leading performance, will continue to drive sales and earnings growth, as reflected in our outlook for 2027," CEO Kathy Warden said.

In this quarter, the company signed new contracts totaling $16.4 billion, with order growth outpacing revenue at a rate of 1.5 times, mainly driven by strong demand for projects such as Sentinel, F-35, Virginia-class submarines, and certain classified programs.

As of September 30, Northrop Grumman's backlog had risen to a record $109.6 billion.

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The company now expects full-year adjusted earnings per share in 2026 to be between $29.35 and $29.75, compared with its previous forecast of $28.60 to $29.10.

Quarterly sales increased by 7% compared to the same period last year, reaching $11.12 billion, boosted by broad growth across all four business divisions. According to data compiled by LSEG (London Stock Exchange Group), analysts had previously expected $11.14 billion.

This growth was mainly due to a 14% increase in the Aeronautics Systems division, which benefited from rising sales of the B-21 bomber, as well as increased production and maintenance work for the F-35 fighter jet.

Its Defense Systems division's sales increased by 12%, thanks to the continued expansion of the Sentinel missile project.

The company reported quarterly earnings per share of $7.89, while analysts had previously expected $7.18 per share.

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