On its quarterly earnings call last week, Northrop Grumman reported favorable cost adjustments on the Air Force’s Sentinel intercontinental ballistic missile program.
Sentinel remains on track for its first flight test in 2027, Kathy Warden, Northrop Grumman’s chair, president and CEO, said Tuesday July 21 on the company’s second quarter earnings call, highlighting a recent acoustic of the missile that “validated the system can withstand the intense conditions of a silo launch.” She also said the rocket motors for the first five Sentinel flight tests are in production.
Another program milestone was the groundbreaking this month on an expansion of the company’s Utah campus that is “purpose-built for Sentinel,” Warden said. The new facility will support Sentinel production when it begins later this decade, she said.
The Northrop Grumman-made Sentinel ICBM will eventually replace the Boeing-made Minuteman III as the Air Force’s silo-based, nuclear-armed ICBM. That is expected sometime in the 2030s while the Minuteman III is still commissioned. The new missile will initially carry W87-0 warheads provided by the National Nuclear Security Administration’s Lawrence Livermore National Laboratory in California, before transitioning to the W87-1 warheads being made at Los Alamos National Laboratory in New Mexico.
Northrop Grumman posted lower net income due to a decline in operating income at two of its business segments in the second quarter and a business divestiture, but sales were higher and the company increased its revenue and earnings outlook for the year.
Net income for the second quarter of 2026, ended June 30, fell 7% to $1.1 billion, $7.68 earnings per share (EPS), from $1.2 billion ($8.15 EPS) a year ago. The divestiture last year of the former training services business contributed to stronger operating income in 2025.
The operating income declines related to the divestiture and rocket motor and missile program challenges, were partially offset by lower taxes. Operating margin across the business segments fell 1.2% to 10.6%.
Sales in the quarter increased 5% to $10.9 billion from $10.4 billion a year ago, driven by growth at each of the company’s business segments, in particular Aeronautics Systems, which was led by the B-21 stealth bomber and E-130J TACAMO nuclear command and control aircraft programs.
Given strong demand and continued momentum, Northrop Grumman raised its sales and earnings guidance for 2026. The outlook for revenue is between $43.8 billion and $44.3 billion, $300 million higher than the prior forecast and driven by work at Aeronautics.
Sales through the first half of 2026 were $20.8 billion, up 5% from a year ago, and net income was 19% higher at $1.7 billion ($13.83 EPS).
The company has a number of opportunities that support a doubling of its international business to $10 billion by 2031, Warden said.
Exchange Monitor affiliate Defense Daily first published a version of this story.