- PRICING
- LIVE QUOTES
- LEARN
- HELP
EN
Why Northrop Grumman Stock Rallied Today
Key Points
Northrop Grumman helps to supply several key weapons systems to the U.S. government.
The defense contractor's backlog climbed to nearly $110 billion.
Shares of Northrop Grumman (NYSE:NOC) rose more than 4% on Tuesday after the aerospace giant highlighted the rising demand for its national security-related products.
The B-21 Raider. Image source: Northrop Grumman.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Arming America and its allies
Northrop's sales grew 7% year over year to $11.1 billion in the third quarter. Growth was driven by a 14% jump in aeronautics systems revenue to $3.6 billion and a 12% rise in defense systems sales to $2.3 billion.
Sales related to the B-21 stealth bomber, F-35 strike fighter, and Sentinel missile contributed to Northrop's gains.
All told, Northrop's net earnings increased 2% to $1.1 billion, or $7.89 per share. That topped Wall Street's expectations, which had called for per-share profits of $7.18.
Defense spending is set to rise
Conflicts in Ukraine and the Middle East are driving the U.S. military and its allies to invest more in defense-related technology.
Net awards of $16.4 billion in the third quarter brought Northrop's order backlog to $109.6 billion.
The defense contractor, in turn, expects full-year net sales of $44 billion in 2026. Management also projects adjusted earnings per share of $29.35 to $29.75 and free cash flow of $3.1 billion to $3.5 billion.
"Globally, we continue to witness unprecedented levels of demand for defense capabilities," CEO Kathy Warden said during a conference call with analysts.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Northrop Grumman. The Motley Fool has a disclosure policy.