Why Is Northrop Grumman (NOC) Stock Rocketing Higher Today

What Happened?

Shares of security and aerospace company Northrop Grumman (NYSE:NOC) jumped 9% in the morning session after the company reported better-than-expected second-quarter financial results and raised its full-year profit guidance. 

The aerospace and defense giant announced second-quarter earnings per share (EPS) of $8.15, which significantly surpassed Wall Street's average estimate. This figure included a notable benefit from the divestiture of its training services business. Revenue for the quarter also topped forecasts, coming in at $10.4 billion. Investors reacted positively to the company's improved forecast for the full year. Northrop Grumman increased its guidance for several key metrics, including MTM-adjusted EPS, now expected to be between $25.00 and $25.40. The company also raised its outlook for segment operating income and free cash flow, signaling confidence in its ongoing performance. CEO Kathy Warden cited strong operational performance and growing global demand as key drivers for the quarter's success.

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What Is The Market Telling Us

Northrop Grumman’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 14.6% on the news that the company reported weak results for the first quarter of 2025: sales came in lower than expected, and profits fell well short of what Wall Street was hoping for. 

What stood out was a big hit in its aircraft business: Northrop booked a $477 million loss on its B-21 bomber program, due to rising costs from production changes and higher material prices. As a result, margins took a hard fall. The top line wasn't any better. Total sales dropped 7% from the previous year, mostly because of big declines in its space and aircraft units, as older programs wound down and new ones didn't ramp up fast enough. This led to earnings per share falling significantly, even though parts of the business like Mission and Defense Systems grew. 

Looking ahead, Northrop stuck to its full-year sales and cash flow outlook, but it cut its profit forecast by more than 10%. It also struck a cautious tone around trade tariffs. 

Overall, the quarter came up short. Separately, competitor Raytheon reported weak earnings and gave underwhelming guidance, raising concerns about the defense sector's ability to hold up amid escalating trade tensions.

Northrop Grumman is up 18.8% since the beginning of the year, and at $556.17 per share, has set a new 52-week high. Investors who bought $1,000 worth of Northrop Grumman’s shares 5 years ago would now be looking at an investment worth $1,760.

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