Northrop Grumman (NOC) posted solid second-quarter results for 2025, with total sales rising 1% year-over-year to $10.35 billion, up from $10.22 billion in Q2 2024. Excluding the impact of its training services divestiture, organic sales grew 2%, reaching $10.31 billion. Sequentially, revenue climbed 9.3% from Q1 2025, reflecting broad-based strength across multiple segments.

The quarter’s growth was led by strong contributions from Mission Systems (+14%), Defense Systems (+7%), and Aeronautics Systems (+2%), which collectively offset a 12% decline in Space Systems, largely due to the wind-down of restricted programs and delays in satellite-related work.

Mission Systems stood out as a top performer, benefiting from restricted award timing and increased demand across radar, marine, and navigation programs. Operating income in the segment rose 22% to $441 million, with margins expanding 100 basis points to 14.0%. Defense Systems also delivered a strong quarter, boosted by higher volume on the Sentinel program and ammunition sales. Operating income surged 32% to $253 million, supported by a favorable $76 million EAC adjustment, lifting margins to 12.7%.

Aeronautics Systems posted moderate growth, aided by progress on the B-21 Raider and ramp-up of the E-130J TACAMO program, while Space Systems faced headwinds from program transitions. Despite a sales decline, Space Systems maintained resilient profitability, with margins improving to 10.6%.

On a product vs. service basis, product sales grew 2% to $8.26 billion, driven by higher volumes in defense and aerospace platforms, while service revenue declined 2%, impacted by the divested training business and lower restricted activity in Aeronautics.

Overall profitability saw a notable boost, with total operating income jumping 31% to $1.43 billion, aided by the $231 million gain from the training services sale and stronger segment results. Net earnings rose 25% to $1.17 billion, while diluted EPS surged 28% to $8.15, helped by a lower share count. Segment operating margin also improved 100 basis points year-over-year to 11.8%.

The company reported $7.4 billion in net awards during the quarter, including $1.8 billion in restricted contracts and $500 million for the F-35. Backlog stood at $89.7 billion, down 2% from year-end 2024, with 40% expected to convert to revenue within a year.

Looking ahead, Northrop Grumman reaffirmed its full-year sales guidance of $42.05–$42.25 billion and raised its outlook for segment operating income and free cash flow. Management cited continued demand amid global tensions, particularly in Europe and the Pacific, while noting persistent inflationary and supply chain pressures. Overall, Q2 reflected a healthy balance of operational execution, margin expansion, and strategic portfolio optimization.