Defense contractor Northrop Grumman delivered a beat-and-raise quarter the stock sorely needed. Still, shares were wavering as investors continue to worry about the sector.

Northrop Grumman reported second-quarter earnings per share of $7.68 from sales of $10.9 billion Tuesday. Wall Street was looking for earnings per share of $6.82 from sales of $10.8 billion.

A year ago, Northrop reported earnings per share of $7.11, excluding a one-time benefit, from sales of $10.4 billion.

For the full year, Northrop now sees adjusted earnings per share of between $28.60 and $29.10. Prior guidance given in April called for earnings per share between $27.40 and $27.90. Wall Street currently projects $27.94.

Shares were down 0.6% in premarket trading at $521.07, while S&P 500 and Dow Jones Industrial Average futures were up 0.6% and 0.3%, respectively.

It's an underwhelming move for a beat-and-raise quarter. Investors just aren't sure what to do with defense stocks these days.

Coming into Tuesday trading, Northrop stock was down about 8% year to date and off about 28% since fighting started in Iran. That a new war in the Middle East would send Northrop stock into a bear market feels a little odd. Shareholders, it seems, are worried about pressure on the defense budget if Democrats win the House of Representatives in the midterm elections.

Regardless of the reaction, the quarter looks solid. Backlog is at a record, and sales grew in each division: aeronautics, defense systems, mission systems, and space systems.

Aeronautics includes products such as the B-2 stealth bomber. Defense systems include missiles. Mission systems include electronics. Space systems include launch and satellite capabilities.

Write to Al Root at allen.root@dowjones.com

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July 21, 2026 07:44 ET (11:44 GMT)

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