As the second week of earnings season draws to a close, companies in several sectors are providing clues about what investors can expect for the remainder of the year. Of course, quarterly revenue and net income are backward-looking metrics. But when combining recent financial performance and full-year guidance, significant trends begin to emerge.
The four companies – from defense contractors to homebuilders to major banks – reported their earnings on Tuesday, July 21, giving an idea of what the market could hold in the second half of 2026.
Northrop Grumman’s Record Backlog Strengthens Defense Spending Issue
Northrop Grumman Today
Northrop Grumman
- 52 week interval
- $479.02
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$774.00
- Dividend Yield
- 1.82%
- The P/E ratio
- 17.22
- Target Value
- $655.24
The energy sector is not the only beneficiary of the war with Iran.
The ongoing war with Iran has also kept defense spending in check, and the administration’s 2027 budget request proposes $1.5 trillion in total defense spending, although Congress has yet to commit to that amount.
Northrop Grumman’s NYSE: NOC Double Q2 gains provided further evidence of strong global demand for defense systems. Earnings per share (EPS) of $7.68 topped the analyst consensus of $6.82, while quarterly revenue of $10.88 billion—up 5.1% year-over-year (YOY)—beat expectations of $10.8 billion.
But the biggest takeaway is that, despite the end of the Iran war, Q2 serves as a prelude to what could be a global conflict. Northrop announced that it earned $20 billion in net awards during the quarter, pushing back its record of $104.7 billion.
As a result, the company raised its 2026 sales guidance to $43.75 billion to $44.25 billion, with full EPS guidance of $28.60 to $29.10.
Defense contractors have been critical to the industry’s efficiency this year. The sector ranks third with a year-to-date (YTD) gain of 15.18%, trailing only technology at 25.57% and energy at 30.84%. With institutional purchases nearly doubling sales over the past 12 months, and a short interest of 1.66% of the float, Northrop should continue to reward shareholders for the rest of the year.
DR Horton Treads Water As Houses Falter, Cancellations Increase
DR Horton Today
- 52 week interval
- $131.75
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$184.54
- Dividend Yield
- 1.23%
- The P/E ratio
- 13.94
- Target Value
- $168.17
With real estate stuck in limbo, homebuilder stocks have been cut short this year.
DR Horton NYSE: DHI he is a perfect role model. Shares are up about 3.7% year-to-date (YTD) ahead of the release of its Q3 earnings.
But now, the stock currently finds itself in one of those downtrends,
After enduring six-digit highs or troughs, the DHI is down just over 3% YTD, and is down about 15% from its three-month high. Much of that can be attributed to a stagnant—if not cooling—housing market.
According to the latest House Market Index (HMI) survey, home builders cut prices by 37% in July, 35% in June, and 32% in May. That’s a bad trend for housing, and big companies are likely to pin their hopes on an interest rate cut from the Federal Reserve later this year.
For DR Horton, that appeared in the company’s latest earnings report. EPS of $3.20 beat analyst expectations of $3.02. And while revenue of $9.23 billion beat expectations of $9.1 billion, the figure was the lowest YOY—an indicator related to the housing market.
Management noted that affordability constraints and cautious consumer sentiment continue to weigh on demand, with orders down YOY and the company’s cancellation rate rising to 20% from 17% last year.
DR Horton lowered its full-year delivery outlook after demand softened later in the quarter, and now expects Q4 to start lower than Q3 while keeping gross margins lower sequentially. That leaves investors with a mixed picture: The builder is still beating expectations in the near term, but demand, price incentives, and margins remain under pressure.
Capital One and Schwab Point in Developing Financial Momentum
This year, financials have performed the third worst among the S&P 500’s 11 sectors. But a string of earnings from major banks has improved the sector’s near-term momentum. The sector appears to have turned around, posting the third best performance with a gain of 7.28%.
Capital One Financial Today
Capital One Financial
- 52 week interval
- $174.24
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$259.64
- Dividend Yield
- 1.58%
- The P/E ratio
- 12.53
- Target Value
- $259.82
Capital One NYSE: COF and Charles Schwab NYSE: SCHW both posted double-digit beats in their Q2 earnings reports.
Last year, Capital One doubled down on its efforts to challenge the Visa duopoly NYSE:V and MasterCard NYSE: MA by expanding its internal payment channels.
Capital One completed its acquisition of Discover in May 2025, and Discover says card accounts will migrate to Capital One in mid-2026 and early 2027, with the big wave scheduled to begin on July 27, 2026.
In an earnings conference call, CEO Richard Fairbank said 50% of new Discover accounts are already in Capital One’s technology space and the company expects all new Discover origins to be in its technology stack by the end of Q3.
The bank missed earnings with EPS of $5.81 compared to analyst expectations of $4.79. However, the result was revenue, which rose 26.9% YOY to $15.83 billion, beating the consensus forecast of $15.76 billion.
Charles Schwab Today
- 52 week interval
- $83.96
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$107.50
- Dividend Yield
- 1.26%
- The P/E ratio
- 18.53
- Target Value
- $119.76
Meanwhile, Schwab posted record EPS and recorded quarterly revenue of $1.62 and $7.07 billion, respectively. Revenue rose 20.9% YOY, and management highlighted a strong operating margin and pre-tax profit margin of 54.3%.
Trading and lending activities were the biggest drivers of the quarter, as daily transactions reached 11.9 million and the bank’s loan balance increased to $67 billion, up 33% YOY.
Looking ahead, the company has emphasized several long-term growth initiatives, including crypto transfers, private markets, AI tools, token infrastructure, and prediction markets tied to financial events.
While these may expand the field over time, they are still in their early stages and are therefore unlikely to affect the 2026 results.
For investors, the common thread improves the momentum. Both stocks may be worth paying attention to if earnings growth continues without a corresponding rise in credit or leverage risk.
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