Northrop Grumman reported a significant loss of $477 million for the B-21 Raider in the first quarter of 2025. This loss was largely attributed to increased manufacturing and material costs associated with producing the sixth-generation stealth bomber.
In a Tuesday statement regarding the company’s financial performance, Northrop disclosed that much of the loss resulted from a change in the B-21 production process. This modification was aimed at increasing the production rate of the bombers. Northrop CEO Kathy Warden emphasized in an earnings call on the same day that macroeconomic factors have also driven up projected material costs for the bomber. The loss affected all five low-rate initial production lots of the B-21.
Despite the financial setback, Warden expressed disappointment but noted that the program continues to make solid progress. She assured investors that the company is meeting performance objectives through ongoing tests and is advancing through the first two production lots, indicating readiness to deliver a highly capable strategic deterrent to the Air Force.
The B-21 loss was a contributor to an overall loss of $183 million within Northrop Grumman’s aeronautics systems division, which reported $2.8 billion in sales, marking an 8% decline from the first quarter of 2024. The company’s profits fell by $498 million compared to the previous year, a decrease of 46% from the $1.1 billion in operating income reported in Q1 2024, primarily due to the B-21 program.
Warden highlighted that the B-21 is nearing the completion of its engineering and manufacturing development phase and is undergoing key tests to validate its operational capabilities. Northrop is currently working through the first two low-rate initial production lots and has initiated advance work on the third and fourth lots.
The B-21 program was introduced in December 2022, when the Air Force and Northrop rolled out the bomber, which is set to replace the aging B-1 Lancer and B-2 Spirit models. The first flight of the B-21 took place in November 2023. Although the development and testing process has been relatively smooth, Warden has cautioned that initial losses on the program were expected, with a transition to profitability anticipated in the future.
This recent loss follows a $1.6 billion loss reported by Northrop in the fourth quarter of 2023. Additionally, it was noted that the inflation-adjusted average procurement unit cost of the B-21 was approximately $692 million, with the Air Force planning to acquire at least 100 units, while leaving the possibility open for further purchases.
Warden explained that the changes in production processes that led to this year’s losses were informed by lessons learned during the scaling up of production, implemented collaboratively with the Air Force. Northrop is optimistic that these issues will become manageable as the company transitions out of the LRIP phase into full-rate production.
In addition to the B-21, Northrop Grumman is also developing the LGM-35A Sentinel intercontinental ballistic missile for the Air Force, designed to replace the Cold War-era Minuteman III missiles. Warden mentioned that a successful static fire test of Sentinel’s first-stage solid rocket motor was conducted in March, though the program is experiencing significant overruns in projected costs, mainly due to higher expenses in constructing necessary facilities. Northrop is working closely with the Air Force to address these challenges and improve overall project efficiency.
