A record $109.6 billion backlog supports Northrop Grumman Corporation’s projection that sales will grow 5% to 7% in 2027, giving the defense contractor a large pipeline of future work.
Northrop Grumman measures the projected growth from the midpoint of its unchanged 2026 sales guidance of $43.75 billion to $44.25 billion. Northrop Grumman’s 2027 outlook presentation puts adjusted free cash flow in a $3.3 billion to $3.7 billion range.
For 2027, the presentation puts the segment operating margin rate 10 to 20 basis points above the midpoint of the company’s 2026 guidance. A basis point is one-hundredth of a percentage point, so that range equals 0.1 to 0.2 percentage points.
The company’s 2026 outlook still calls for $3.1 billion to $3.5 billion in adjusted free cash flow. It raised its separate 2026 profit guidance when it reported third-quarter results, as detailed in earlier coverage of its quarterly results.
The backlog stood at $109.6 billion as of Sept. 30, after the company recorded $16.4 billion in net awards during the quarter. Northrop Grumman has pointed to customer demand, its portfolio and its investments in discussing prospects for further growth.
Quarterly sales reached $11.1 billion, up 7% from a year earlier. Revenue rose across all four of the company’s sectors, including gains of 14% at Aeronautics Systems and 12% at Defense Systems. Its segment operating margin rate was 12.1%, compared with 12.3% a year earlier.
Adjusted free cash flow totaled $1.81 billion in the third quarter, a 44% increase. The total included $371 million in proceeds from equipment sold to a customer, which contributed to the increase in cash flow.
Northrop Grumman’s forecasts exclude the potential effects of a prolonged U.S. government shutdown and limits or cuts to government spending. The company expects sales growth to accelerate further in 2028.
