Northrop Grumman Corp. (NYSE: NOC) announced today that it has incurred a $477 million pretax loss on the first batch of five aircraft for its B-21 Raider stealth bomber program. The loss, which stems from the low-rate initial production (LRIP) phase of the program, was revealed during the company’s first-quarter earnings call.
Kathy Warden, CEO of Northrop Grumman, explained that the $477 million pretax charge was largely due to adjustments made in the production process aimed at enabling a higher production rate. These changes resulted in increased manufacturing costs. Additionally, macroeconomic factors, including material price hikes potentially influenced by tariffs, have contributed to the rise in material costs.
“We remain committed to delivering the B-21 Raider to the U.S. Air Force, despite the financial setback,” said Warden. “While this financial impact is disappointing, we continue to make strong progress on the program, meeting key performance objectives through rigorous testing. We are now progressing through the first two lots of production, and with lessons learned, we are ready to provide the Air Force with this highly capable strategic deterrent.”
The B-21 Raider program, which Northrop Grumman has been developing since 2015, is part of the U.S. Air Force’s initiative to replace its aging fleet of bombers. Northrop has touted the B-21 as the “next evolution” of the Air Force’s strategic bomber fleet, designed to significantly enhance the U.S.’s long-range strike capabilities.
This latest announcement follows a $1.56 billion pretax charge disclosed in January 2024, which Warden attributed to changes in the company’s economic assumptions and increased manufacturing costs.
Despite the significant financial impact from the B-21 Raider aircraft program, Northrop Grumman reported net earnings of $481 million for the first quarter of 2025, compared to $944 million in the same period last year. This resulted in a $463 million decrease in year-over-year earnings. The company’s sales for the quarter also fell by $655 million, or 7%, primarily due to the wind-down of certain space programs.
Northrop’s operating income dropped by $498 million, or 46%, mainly due to the $477 million loss on the B-21 program. However, Warden noted that excluding the impact of the B-21 program, Northrop’s margin rates were in line with expectations.
The announcement of the financial results led to a 14% drop in the company’s stock price on the New York Stock Exchange.
Despite the challenges faced in the B-21 Raider program, Northrop Grumman has continued to make progress on other key initiatives. In March 2025, the company successfully conducted its first full-scale static test fire of the stage-one rocket motor for the LGM-35A Sentinel intercontinental ballistic missile system, which will replace the aging LGM-30 Minuteman III missiles as part of the U.S. nuclear triad.
Warden also highlighted a recent $481 million contract from the U.S. Army, awarded in January, for the expansion of software development for the Army’s Integrated Air and Missile Defense Battle Command System (IBCS).
“These achievements underscore our continued commitment to providing critical capabilities to the U.S. military, and we are confident in our ability to drive future growth,” Warden concluded.
For more information on Northrop Grumman’s financial results and key program updates, visit [company website].
