Northrop Grumman Corporation NOC
NYSEAerospace and defenseFinancials to Jun 30, 2026 · Updated Oct 6, 2026
Moat ranks
Balance sheet
| $B | Dec 31 | Jun 30 |
|---|---|---|
| Cash | 4.4 | 2.3 |
| Securities | 0.0 | 0.0 |
| Debt | 15.7 | 15.2 |
| Net cash | -11.3 | -12.9 |
| Equity | 16.7 | 17.9 |
- Debt / EBITDA
- 2.48×
- Debt / equity
- 0.85×
- Leases (12/31/25)
- $2.2B
- Diluted shares
- 142M
- Book value / share
- $125.59
- Price / book
- 3.8×
- Net cash / share
- −$90.48
- Market cap
- $67.6B
- Enterprise value
- $80.5B
Per-share record
Key indicators
| Indicator | Latest | Vs year ago | Last 8 quarters |
|---|---|---|---|
| Revenue growth | 5.1% | +3.8 pts | |
| Operating margin | 10.1% | -3.7 pts | |
| FCF margin | 9.0% | +2.8 pts | |
| Capex / revenue | 2.8% | +0.5 pts | |
| Aeronautics Systems sales | $3.5B | +13% | |
| Aeronautics Systems operating income | $362M | +13% | |
| Defense Systems sales | $2.1B | +5% | |
| Defense Systems operating income | $156M | -38% | |
| Mission Systems sales | $3.3B | +3% |
Margins and growth from reported quarters; company KPIs as reported in results releases.
About NOC
Northrop builds military aircraft, strategic missiles, sensors and national security space systems. Its protection comes from qualified designs and specialized rocket-motor capacity inside long-lived programs.
- Design In Qualification
Northrop designs and integrates the B-21 bomber and is already in low-rate production.
- Design In Qualification
Northrop leads the cost-type Sentinel development program and integrates IBCS with military sensors and interceptors.
- Capacity Moat
Qualified facilities, energetic-material handling and flight-tested rocket motors limit the pool of suppliers able to expand missile output quickly.
- Switching Costs General
Radar, electronic warfare and communications systems are integrated into aircraft and other military platforms.
- Sep 29, 2026
The Navy selected Boeing for F/A-XX, removing a potential new Northrop fighter franchise while leaving the existing B-21 program intact.
- Sep 14, 2026
Northrop and the Air Force assembled an inert Sentinel missile, completing a key integration milestone toward a planned 2027 flight test. Production cost and infrastructure risks remain.
- Sep 8, 2026
Northrop opened its Elkton propulsion engineering center as part of an investment over $100 million. The facility adds engineering capacity for advanced motors, rather than immediately increasing every production line. Source: https://governor.maryland.gov/news/press-releases/governor-moore-and-northrop-grumman-celebrate-ribbon-cutting-new-propulsion-innovation-center
- Aug 19, 2026
Northrop granted Kathy Warden a performance equity award tied to share-price performance through 2031 and continued service, extending management incentives across the production investment period. Source: https://www.sec.gov/Archives/edgar/data/1133421/000162828026058480/noc-20260819.htm
- Aug 3, 2026
Northrop signed multi-year PAC-3 and THAAD framework agreements worth over $3 billion, supporting greater use of expanded qualified missile-component capacity and widening the capacity moat. Funding, deliveries and profit remain the tests.
Ownership
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On this page
Financial record
| Fiscal year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | TTM | Trend | Change 2016–25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Per share ($) | |||||||||||||
| Revenue | 136.88 | 148.09 | 172.37 | 199.06 | 219.56 | 221.67 | 235.23 | 258.49 | 278.57 | 291.75 | 301.21 | +8.8%/yr | |
| Cash flow | 15.58 | 14.88 | 21.92 | 25.28 | 25.69 | 22.17 | 18.64 | 25.49 | 29.79 | 33.08 | 35.66 | +8.7%/yr | |
| Earnings | 11.32 | 16.34 | 18.49 | 13.22 | 19.03 | 43.54 | 31.47 | 13.53 | 28.34 | 29.08 | 31.57 | +11.1%/yr | |
| Free cash flow | 10.49 | 9.60 | 14.77 | 17.84 | 17.21 | 13.37 | 9.42 | 13.82 | 17.79 | 23.00 | 25.60 | +9.1%/yr | |
| Capex | 5.10 | 5.28 | 7.15 | 7.44 | 8.47 | 8.79 | 9.22 | 11.68 | 12.00 | 10.08 | 10.06 | +7.9%/yr | |
| Dividends | 3.55 | 3.92 | 4.70 | 5.18 | 5.69 | 6.11 | 6.76 | 7.34 | 8.05 | 8.99 | 9.43 | +10.9%/yr | |
| Book value | 29.71 | 40.62 | 46.89 | 51.88 | 63.12 | 80.34 | 98.41 | 97.34 | 103.80 | 115.95 | 125.59 | +16.3%/yr | |
| Diluted shares (M) | 181 | 176 | 175 | 170 | 168 | 161 | 156 | 152 | 147 | 144 | 142 | -2.5%/yr | |
| Totals ($B) | |||||||||||||
| Revenue | 24.7 | 26.0 | 30.1 | 33.8 | 36.8 | 35.7 | 36.6 | 39.3 | 41.0 | 42.0 | 42.9 | +6.1%/yr | |
| Operating income | 3.3 | 3.2 | 3.8 | 4.0 | 4.1 | 5.7 | 3.6 | 2.5 | 4.4 | 4.5 | 4.6 | +3.6%/yr | |
| Net income | 2.0 | 2.9 | 3.2 | 2.2 | 3.2 | 7.0 | 4.9 | 2.1 | 4.2 | 4.2 | 4.5 | +8.3%/yr | |
| Free cash flow | 1.9 | 1.7 | 2.6 | 3.0 | 2.9 | 2.2 | 1.5 | 2.1 | 2.6 | 3.3 | 3.6 | +6.4%/yr | |
| Buybacks | 1.5 | 0.4 | 1.3 | 0.7 | 0.5 | 3.7 | 1.5 | 1.5 | 2.5 | 1.6 | 0.8 | +0.5%/yr | |
| Dividends | 0.6 | 0.7 | 0.8 | 0.9 | 1.0 | 1.0 | 1.1 | 1.1 | 1.2 | 1.3 | 1.3 | +8.1%/yr | |
| Net cash | -4.5 | -4.0 | -12.8 | -11.6 | -10.1 | -9.3 | -10.3 | -10.7 | -11.9 | -11.3 | -12.9 | −$6.8B | |
| Margins & returns (%) | |||||||||||||
| Gross margin | 23.9 | 22.8 | 22.6 | 21.5 | 20.3 | 20.4 | 20.4 | 16.7 | 20.4 | 19.8 | 20.1 | -4.1 pts | |
| Operating margin | 13.3 | 12.4 | 12.6 | 11.7 | 11.0 | 15.8 | 9.8 | 6.5 | 10.6 | 10.8 | 10.7 | -2.5 pts | |
| Net margin | 8.3 | 11.0 | 10.7 | 6.6 | 8.7 | 19.6 | 13.4 | 5.2 | 10.2 | 10.0 | 10.5 | +1.7 pts | |
| FCF margin | 7.7 | 6.5 | 8.6 | 9.0 | 7.8 | 6.0 | 4.0 | 5.3 | 6.4 | 7.9 | 8.5 | +0.2 pts | |
| ROIC | 27.7 | 24.1 | 15.0 | 16.2 | 16.4 | 21.3 | 11.8 | 8.3 | 13.4 | 13.5 | 12.5 | -14.2 pts | |
| Return on equity | 38.1 | 40.2 | 39.4 | 25.5 | 30.1 | 54.2 | 32.0 | 13.9 | 27.3 | 25.1 | 25.1 | -13.0 pts | |
| R&D % of revenue | 2.9 | 2.5 | 2.5 | 2.8 | 3.0 | 3.1 | 3.3 | 3.1 | 2.7 | 2.6 | – | -0.2 pts | |
| Stock pay % of revenue | 0.4 | 0.4 | 0.3 | 0.4 | 0.2 | 0.3 | 0.3 | 0.2 | 0.2 | 0.3 | 0.3 | -0.1 pts | |
| Capex % of revenue | 3.7 | 3.6 | 4.2 | 3.7 | 3.9 | 4.0 | 3.9 | 4.5 | 4.3 | 3.5 | 3.3 | -0.3 pts | |
Change uses 2016 and 2025 only: compound annual growth for amounts, points for margins and returns, and the change in amount for net cash. A dash means no 2016 base. Trend shows the fiscal years.
Moat
Moat scorecard
- Strength
- Confidence
- Structure
- Oligopoly
- Durability
- durable
- Trajectory
- stable
- Pricing power
- moderate
- Aeronautics Systems32.0%1 claim
- Defense Systems18.7%2 claims
- Mission Systems25.6%1 claim
- Space Systems23.7%1 claim
Moat claims
- Applies to
- Aeronautics Systems
- Confidence
- Durability
- durable
- Trajectory
- stableas of Oct 6, 2026
Northrop designs and integrates the B-21 bomber and is already in low-rate production. Replacing its airframe design, stealth manufacturing process and qualified supplier network mid-program would take years and put delivery at risk. This protects the incumbent program, while new programs remain competitive.
B-21 production expansion supports a long-lived platform position, but new capital spending and existing losses limit the economic return. The F/A-XX loss shows that the B-21 position does not protect entry into a new aircraft competition.
- Aeronautics Systems sales$3.5B+13%
- Aeronautics Systems operating income$362M+13%
- Aeronautics Systems backlog$24.6B+4%
- Funded backlog$45.9B+23%
- Aeronautics Systems contract profit revisions$157M+423%
- Technology shifts toward new architectures
- Manufacturing or quality issues driving cost overruns
- Government-directed platform mix changes
- FilingQ2 2026 Form 10-Q: B-21 production agreement and capital commitmentJul 21, 2026
- FilingFY2025 Form 10-K (Competitive conditions)Jan 27, 2026
- FilingFY2025 Form 10-K (Key Aeronautics programs)Jan 27, 2026
- Applies to
- Defense Systems
- Confidence
- Durability
- durable
- Trajectory
- stableas of Oct 6, 2026
Northrop leads the cost-type Sentinel development program and integrates IBCS with military sensors and interceptors. Replacing the qualified design team mid-program requires new engineering and testing. The barrier is specific to these systems and does not remove customer control over budgets, scope or production pricing.
Sentinel added $7.6 billion of awards in Q2 and reached full inert missile assembly in September. This supports the incumbent design position; flight testing, infrastructure redesign and future production pricing remain open.
- Defense Systems sales$2.1B+5%
- Defense Systems operating income$156M-38%
- Defense Systems backlog$34.7B+28%
- Funded backlog$45.9B+23%
- Defense Systems contract profit revisions−$40M-148%
- Government-directed second sourcing
- Schedule slips or technical setbacks
- Changes in threat environment shifting priorities
- SourceUS Air Force Sentinel inert missile integration milestoneSep 14, 2026
- FilingFY2025 Form 10-K (Sentinel program reference)Jan 27, 2026
- FilingFY2025 Form 10-K (Competitive conditions: long cycles)Jan 27, 2026
- Applies to
- Defense Systems
- Confidence
- Durability
- medium
- Trajectory
- wideningas of Oct 6, 2026
Qualified facilities, energetic-material handling and flight-tested rocket motors limit the pool of suppliers able to expand missile output quickly. Multi-year PAC-3 and THAAD demand makes existing certified capacity more useful; planned expansion still requires execution and customer funding.
August PAC-3 and THAAD framework agreements add multi-year demand to expanded qualified rocket-motor and component capacity. Actual funded orders, delivery rates and profit must confirm the benefit; government support can also help competitors expand.
- Defense Systems sales$2.1B+5%
- Defense Systems operating income$156M-38%
- Defense Systems backlog$34.7B+28%
- Funded backlog$45.9B+23%
- Defense Systems contract profit revisions−$40M-148%
- Competitor capacity expansion
- Supply chain disruptions for energetic materials
- Regulatory constraints on production
- SourceNorthrop PAC-3 and THAAD multi-year framework agreementsAug 3, 2026
- FilingFY2025 Form 10-K (Defense Systems products: advanced propulsion)Jan 27, 2026
- Applies to
- Mission Systems
- Confidence
- Durability
- durable
- Trajectory
- stableas of Oct 6, 2026
Radar, electronic warfare and communications systems are integrated into aircraft and other military platforms. A supplier change requires software, interfaces and hardware to be tested together, creating follow-on work for the incumbent. Open architectures and new sensor competitions can gradually reduce that protection.
Installed radar and electronic warfare systems continue to generate follow-on work. Mission Systems profit rose in Q2, but favorable contract revisions account for part of the gain and backlog was slightly below year-end.
- Mission Systems sales$3.3B+3%
- Mission Systems operating income$501M+14%
- Mission Systems backlog$18.5B+5%
- Funded backlog$45.9B+23%
- Mission Systems contract profit revisions$69M+1,280%
- Rapid technology cycles in electronics
- Open-architecture mandates increasing interchangeability
- Cyber vulnerabilities damaging trust
- FilingQ2 2026 Form 10-Q: Mission Systems profit and contract revisionsJul 21, 2026
- FilingFY2025 Form 10-K (Mission Systems overview)Jan 27, 2026
- FilingFY2025 Form 10-K (Competitive conditions: long cycles)Jan 27, 2026
- Applies to
- Space Systems
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 6, 2026
Flight-qualified solid rocket boosters and large motors require specialized casting, materials and production facilities. Customers already using these designs face a lengthy alternative qualification process. GEM 63XL cost increases show that scarce qualified capacity can still earn weak returns when quality or completion estimates deteriorate.
Qualified boosters remain embedded in launch programs, but GEM 63XL corrective work and rising completion costs are reducing returns. Capacity growth does not by itself prove better unit economics or reliable delivery.
- Space Systems sales$2.8B+4%
- Space Systems operating income$236M-16%
- Space Systems backlog$27.0B+25%
- Funded backlog$45.9B+23%
- Space Systems contract profit revisions−$91M-800%
- Competitor investments in propulsion
- Program delays reducing volume and learning benefits
- Policy shifts toward alternative propulsion architectures
- FilingQ2 2026 Form 10-Q: GEM 63XL completion-cost and corrective-work revisionsJul 21, 2026
- FilingFY2025 Form 10-K (Solid rocket motors for NASA SLS)Jan 27, 2026
- FilingFY2025 Form 10-K (Launch vehicle propulsion components)Jan 27, 2026
Profile change log
- Oct 6, 2026 · analyst revision
The segment assessment now distinguishes protected installed programs from new-platform competitions, adds trajectories and the bull and bear tests, and removes segment-profit shares that did not include corporate costs or FAS/CAS adjustments.
- Oct 6, 2026 · business change
The Navy selected Boeing for F/A-XX, removing a potential new Northrop fighter franchise while leaving the existing B-21 program intact.
- Oct 6, 2026 · business change
Northrop and the Air Force assembled an inert Sentinel missile, completing a key integration milestone toward a planned 2027 flight test. Production cost and infrastructure risks remain.
- Oct 6, 2026 · business change
Northrop opened its Elkton propulsion engineering center as part of an investment over $100 million. The facility adds engineering capacity for advanced motors, rather than immediately increasing every production line. Source: https://governor.maryland.gov/news/press-releases/governor-moore-and-northrop-grumman-celebrate-ribbon-cutting-new-propulsion-innovation-center
- Oct 6, 2026 · business change
Northrop granted Kathy Warden a performance equity award tied to share-price performance through 2031 and continued service, extending management incentives across the production investment period. Source: https://www.sec.gov/Archives/edgar/data/1133421/000162828026058480/noc-20260819.htm
- Oct 6, 2026 · business change
Northrop signed multi-year PAC-3 and THAAD framework agreements worth over $3 billion, supporting greater use of expanded qualified missile-component capacity and widening the capacity moat. Funding, deliveries and profit remain the tests.
- Oct 6, 2026 · business change
Northrop raised 2026 sales guidance to $43.75-$44.25 billion and adjusted EPS guidance to $28.60-$29.10. Operating-income and cash-flow guidance stayed unchanged, so stronger demand did not yet improve the cash outlook.
- Oct 6, 2026 · business change
Northrop and the Air Force agreed to accelerate B-21 production. The program gains follow-on demand, with about $2.5 billion of multi-year Northrop capacity investment still required.
- Oct 6, 2026 · business change
Northrop sold its training services business for $333 million and recognized a $231 million operating gain. Defense comparisons include that business only up to the sale.
- Oct 6, 2026 · business change
Northrop sold its IT and mission support services business for $3.4 billion, concentrating its portfolio on defense technology and generating a $1.98 billion operating gain.
- Oct 6, 2026 · business change
Northrop bought Orbital ATK, adding solid rocket motors, missile components and launch capabilities. The acquisition explains the step-up in revenue, debt and goodwill.
Industry & peers
Peer map
Hover a point for its values; click a peer to compare. Dashed lines: industry medians.
Defense aerospace and space systems
Prime development and integration of military aircraft, helicopters, satellites, missile and mission systems, plus government civil-space programs and lifecycle support attached to these platforms. This excludes most land and naval equipment and general maintenance sold independently of prime programs.
| Stocks | Moat | Gross m. | Op. m. | |
|---|---|---|---|---|
| NOC | 67 | 20.1% | 10.7% | |
| Industry median | 19 | 80 | 20.1% | 10.7% |
| Sector median | 88 | 76 | 37.0% | 17.5% |
| All stocks median | 398 | 76 | 52.9% | 19.6% |
Moat medians cover every stock. Margin medians count only stocks with collected numbers and need at least three.
Drivers & risks
- Geopolitics, deterrence and fleet modernization have a strong effect on procurement priorities. They support demand over long periods but can move funding between aircraft, missiles, space and other equipment.
- Government budgets and appropriations have a strong effect on awards and cash timing. Continuing resolutions can delay new starts even when long-term defense demand remains high.
- Export approvals and allied spending expand potential volumes. US security and technology-transfer rules strongly influence which platforms can be sold abroad. In Europe, sovereign procurement and local-content requirements also affect production locations and the share of work retained by the prime.
- Inflation, wages and supplier capacity have a strong effect on fixed-price program profit. Revenue growth can coexist with losses when completion estimates rise.
- Interest rates and the general economic cycle have a weaker immediate effect on orders than on commercial aviation. Rates still affect contractor financing and fiscal capacity; dollar strength can raise the cost to allied buyers.
- A small number of governments are powerful buyers. Program cancellation or a failed recompete can remove years of expected revenue. French requested Rafale deferrals show that a firm contract can still produce later deliveries.
- Technically complex development can require further losses after earlier write-downs. New drones and open-system architectures can also shift profit from established platforms to software and specialist components.
- Supply competition with commercial aviation and other defense programs can increase delays, wage costs and material prices.
- Export limits, sanctions and changes in alliances can close markets or alter production plans.
- Customer-funded primes can earn interest on advances, but lower treasury yields and financing expenses on long-term contracts can reduce that benefit. Supplier advances and inventory use part of the cash before aircraft delivery.
Bulls & bears
Can Northrop convert its expanding missile and aircraft orders into stronger profit and cash without further cost overruns or losing new platform competitions?
Arguments
What to watch
- 1Segment and funded backlog, followed by executed orders from PAC-3 and THAAD frameworks
- 2Aeronautics sales, B-21 loss accrual and production investment
- 3Defense and Space operating income and net contract profit revisions
- 4Mission Systems follow-on awards and operating income
- 5Operating cash flow, capital spending and government payment timing
Next check: October 20, 2026 Q3 results: test funded orders and delivery progress against contract cost revisions, cash generation and the B-21 investment plan.
Sources: company filings and dated sources collected for Find My Moat; market cap as of Oct 5, 2026. Not investment advice.
Free to reuse, commercially too, with a credit link. See the data license.
Moat Score 67/100 by <a href="https://www.findmymoat.com/stocks/XNYS:NOC">Find My Moat</a> (as of September 2026)Request update
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