Defense Earnings Day: GE, RTX, Northrop Report Amid War
Three defense giants report Q1 results Tuesday as Iran conflict boosts demand. Wall Street expects 83% EPS growth from Northrop Grumman.
The defense sector's biggest earnings day of the quarter lands in the middle of a shooting war.
GE Aerospace, RTX, and Northrop Grumman all report Q1 2026 results Tuesday morning. With U.S.-Iran tensions at their peak and the ceasefire expiring today, these numbers carry more weight than usual.
Defense stocks have already run hard. The question now: can fundamentals justify the rally?
What Wall Street Expects
| Company | EPS Estimate | YoY Change | Revenue Estimate |
|---|---|---|---|
| GE Aerospace | $1.02 | +14% | $9.2B |
| RTX | $1.51 | +3% | $21.45B |
| Northrop Grumman | $6.06 | +83% | $9.75B |
Northrop's expected 83% EPS jump reflects easier comparisons and improving margins on fixed-price contracts. RTX's modest growth masks steady improvement in Pratt & Whitney engine deliveries after years of supply chain chaos.
GE Aerospace is the wild card. The company carries a massive backlog exceeding $175 billion. Converting that to revenue depends on supply chain execution.
The War Premium
Defense stocks have rallied since Trump's Iran campaign began. Lockheed Martin is up 28% year-to-date. Northrop has gained 35%. The sector trades at multi-year valuation highs.
The bull case: this isn't just sentiment. Actual orders are flowing. Trump's $1.5 trillion defense budget proposal—if passed—would represent the largest military spending increase since Reagan. NATO allies are boosting procurement. Middle East partners want American hardware.
The bear case: defense stocks are priced for permanent escalation. If Iran negotiations succeed and the Strait of Hormuz reopens fully, the urgency fades. Peace is bearish for Raytheon missiles.
What To Watch
Beyond the headline numbers, three things matter on the calls:
Supply chain updates. Engine manufacturers have struggled with titanium and specialized alloy shortages. Any improvement signals better revenue conversion ahead.
Backlog composition. How much is firm orders versus options? Defense backlogs can look impressive until you realize half is cancelable.
Margin commentary. Fixed-price contracts signed during the inflationary surge are finally rolling off. New contracts should carry better economics.
The broader market will watch these reports for macro signals too. Defense spending is one of the few areas of fiscal policy both parties support. These companies are levered to government budgets that keep growing regardless of who wins elections.
Results hit before the bell. GE Aerospace's call is at 7:30 AM ET.