Northrop Grumman (NOC) Down 6.4% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Northrop Grumman (NOC). Shares have lost about 6.4% in that time frame, underperforming the S&P 500.But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Northrop Grumman due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Northrop Grumman Corporation before we dive into how investors and analysts have reacted as of late.Northrop Grumman Q1 Earnings Surpass Estimates, Sales Increase Y/YNorthrop Grumman reported first-quarter 2026 adjusted earnings of $6.14 per share, which beat the Zacks Consensus Estimate of $6.08 by 1%. The bottom line also improved 1.3% from the year-ago quarter’s level of $6.06.The year-over-year growth can be attributed to higher revenues and lower operating costs and expenses during the quarter.NOC’s Total SalesNOC’s total sales of $9.88 billion in the first quarter beat the Zacks Consensus Estimate of $9.79 billion by 1%. The top line also improved 4.4% from $9.47 billion reported in the year-ago quarter.Northrop Grumman’s BacklogThe company’s total backlog was $95.61 billion at the end of the first quarter compared with $95.68 billion at the end of fourth-quarter 2025.NOC’s Segmental DetailsAeronautics Systems: This segment’s sales of $3.28 billion rose 16.7% year over year, driven by higher sales from B-21 and other restricted programs, as well as increased volume on the E-130J TACAMO program.The unit’s operating income totaled $305 million against the operating loss of $183 million in the first quarter of 2025. Its operating profit margin also improved to 9.3% from an operating loss margin of 6.5% in the first quarter of 2025.Mission Systems: Sales in this segment increased 1.9% to $2.86 billion. This was driven by ramp-up on restricted airborne radar programs and higher volume on marine systems programs.The unit’s operating income increased 19.9% to $433 million. The operating margin expanded 220 basis points (bps) to 15.1%.Defense Systems: This segment’s sales rose 5.2% year over year to $1.90 billion. This improvement was driven by the continued ramp-up of the Sentinel program, as well as the higher volume of tactical solid rocket motor programs and the Integrated Battle Command System portfolio.The unit’s operating income improved 2.8% year over year to $184 million. The operating margin contracted 20 bps to 9.7%.Space Systems: Sales in this segment declined 3.4% to $2.48 billion due to the winding down of work on the restricted space and NGI programs, as well as lower volume on the Graphite Epoxy Motor 63XL program.The segment’s operating income decreased 17% year over year to $235 million. The operating margin also contracted 150 bps to 9.5%.Northrop Grumman’s Operational UpdateTotal operating income during the quarter totaled $989 million, reflecting a significant increase from $573 million in the prior-year quarter.NOC’s Financial ConditionNorthrop Grumman’s cash and cash equivalents as of March 31, 2026, totaled $2.09 billion, down from $4.40 billion as of Dec. 31, 2025.Long-term debt (net of the current portion) amounted to $14.41 billion compared with $15.16 billion as of Dec. 31, 2025.Net cash outflow from operating activities totaled $1.66 billion during the first three months of 2026, compared with $1.57 billion a year ago.Northrop Grumman’s 2026 GuidanceThe company expects its revenues to be in the range of $43.50-$44.00 billion. The Zacks Consensus Estimate for sales is pegged at $43.87 billion, higher than the midpoint of the company’s guided range.NOC expects adjusted earnings to be in the band of $27.40-$27.90 per share. The consensus estimate for earnings is pegged at $28.19 per share, above the company’s guided range.Northrop Grumman projects to generate adjusted free cash flow in the band of $3.10-$3.50 billion.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.VGM ScoresCurrently, Northrop Grumman has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Northrop Grumman has a Zacks Rank #3 (Hold). 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