Northrop Grumman cuts earnings outlook on B-21 bomber costs
Northrop Grumman Corp. reported first-quarter profit that missed analysts’ expectations and cut its earnings forecast for the year as costs mounted for its next-generation B-21 stealth bomber.
The shares fell Tuesday after Northrop said per-share profit declined by 47% in the first quarter, primarily due to new loss provisions tied to the B-21.
Northrop, which for 2023 took a nearly $1.6 billion pretax charge on the program, added $477 million to the tally, as manufacturing costs rose and the company invested in its production systems to speed the program’s ramp-up.
For all of 2025, Northrop slashed its outlook for operating income by as much as $600 million. Adjusted earnings per share will be in a range of $24.95 to $25.35, down from a prior forecast of $27.85 to $28.85. The outlook is “well below” estimates of Jefferies analyst Sheila Kahyaoglu, she said in a research note.
First-quarter revenue declined 7% to $9.47 billion, Northrop said. The shares slid 8.9% in premarket U.S. trading.
Northrop reported earnings on the same day as Lockheed Martin Corp., the world’s biggest defense contractor. The maker of the F-35 fighter jet maintained its full-year outlook for earnings per share of $27 to $27.30, and net sales in a range of $73.75 billion to $74.75 billion.
Lockheed shares advanced 3.4% in premarket U.S. trading.
Defense companies have outperformed the broader market since U.S. President Donald Trump unleashed sweeping tariffs against most U.S. trading partners, given the shelter provided by their U.S.-based supply chains and Trump’s upcoming budget for fiscal 2026. It’s expected to push the Pentagon’s spending above the $1 trillion mark.
Still, U.S. defense companies aren’t immune to the turmoil caused by Trump’s bid to upend the decades-old global trade order. China, slapped with U.S. tariffs of up to 145%, has threatened to clamp down on exports of rare earth elements used in high-end weapons systems.
Lockheed cautioned that its outlook doesn’t include “the evolving impacts of tariffs or related recoveries,” or any executive orders issued by the Trump administration.
RTX Corp. on Tuesday also reported earnings, saying that tariffs could pose a significant hit to earnings. Operating profit could take an around $250 million hit related to Canada and Mexico tariffs, as could profit linked to duties on trade with China, RTX said
The company, formerly known as Raytheon, makes jet engines, aircraft components and Patriot missile-defense systems. It expects 2025 sales of $83 billion to $84 billion and earnings of $6 to $6.15 per share. Executives are set to provide more detail about tariffs on a call with analysts.
RTX shares fell about 4.5% in premarket trading
Northrop’s B-21 is the successor to the blended-wing B-2 stealth bomber that’s three decades old. The next-generation version is undergoing flight tests; the loss recognized on Tuesday was tied to five low-rate initial production options.
Analysts including Seth Seifman at JPMorgan see Northrop as the favorite to win a contract to design and build the Navy’s sixth-generation fighter, dubbed F/A-XX, although Boeing Co. is also in the running.
Lockheed reportedly has been eliminated, leaving its role as the leading fighter jet manufacturer in question.