NOC

Northrop Grumman opened 2026 with first quarter sales of $9.9 billion, up 4% year over year and 5% organically, landing squarely in line with the company's full-year mid-single-digit growth framework. EPS of $6.14 beat the consensus estimate of $6.08, driven by higher Aeronautics Systems volumes and a meaningful improvement in Mission Systems margins. The quarter's most consequential development was not the headline numbers but the formalization of a production rate increase on the B-21 Raider, a 25% acceleration in annual output backed by approximately $2.5 billion of company-funded capital investment phased primarily through 2027, 2029, with $200 million incremental CapEx already embedded in the 2026 guide. Management was explicit that the deal improves return on invested capital over the program's life to a level meaningfully above cost of capital, and that the EAC review following the agreement produced no significant net change, some higher near-term production costs on earlier lots were offset by improved profitability on later units. The Air Force's commitment to a defined contracted quantity, combined with active consideration of a larger program of record, was offered as the structural distinction from the B-2 curtailment precedent that investors have long worried about.