Northrop Grumman is experiencing a $477 million pre-tax loss related to its B-21 Raider program, which is aimed at accelerating the production of the new stealth bomber beyond the Pentagon’s current requests. This loss is connected to the first five low-rate initial production lots and adds to the company’s prior reported loss of $1.56 billion for the program in January.
CEO Kathy Warden explained during a first-quarter earnings call that the recent financial hit is due to a “process change” intended to increase production rates, along with an underestimation of materials’ cost and quantity necessary for the initial five production lots. Warden emphasized that this joint decision with the Air Force is expected to enhance profitability for the program in the long run, stating that “this is not something we will need to do again.”
The U.S. Air Force originally planned to procure 100 B-21s by the mid-to-late 2030s, but discussions have indicated a possible increase to 145 units. Warden mentioned that the Air Force is still assessing its options and will seek further guidance after finalizing the budget request.
According to Warden, the loss primarily stems from the process change, but the company also underestimated material costs due to macroeconomic factors. She expressed confidence that lessons learned from the production of the first two lots will help avoid such issues in the future.
In addition to the B-21, Warden provided updates on the Air Force’s Sentinel Intercontinental Ballistic Missile (ICBM) program, which is currently on hold due to efforts to reduce its projected cost of $141 billion—a figure that has increased by 81% over initial estimates. The company is collaborating with the Pentagon to identify potential cost-cutting measures while ensuring that any changes in requirements are accurately reflected in the design and contracts.
Warden also addressed a recent explosion at Northrop Grumman’s space-related facilities in Promontory, Utah, which destroyed a building involved in producing components for solid rocket motor propellants. She assured that this incident would not impact any current programs, including the Sentinel, as the company has alternative suppliers for the needed materials.
