Until recently, all seemed to be going well with the development of the B-21 Raider stealth bomber. The program appeared to be on time and under budget. Workers have toiled diligently on production models at the manufacturing facility in Palmdale, California, and one B-21 is already in flight mode. Northrop Grumman was excited about the future. The behemoth defense contractor made a huge bet on the airplane, and it seemed to have won.
But it turns out that the B-21 program’s extremely high up-front costs hurt Northrop Grumman’s bottom line this year.
Northrop’s Operating Loss Is an Eye Opener on B-21 Raider
Northrop Grumman is recalculating costs for the B-21. The stealth bomber is expensive to make, and as a result, the company had a 49 percent reduction in net earnings last quarter. Northrop lost $1.2 billion on the program in 2024. It is too late to turn back now. The Air Force wants 100 B-21s, and some analysts—and at least one Air Force general—have called for as many as 145 Raiders to be built.
Northrop was not misleading anyone with its past figures. The company already warned that the first five lots would be produced at some level of operating loss, but they could not foresee just how disappointing the 2025 figures would be. The company’s total first-quarter sales were $9.47 billion, down 7 percent year-over-year. The major problem was the B-21 program. Northrop Grumman had to write off a $477 million loss on the project in the first quarter of 2025. It has taken a nearly $2 billion hit on net income in aggregate.
The CEO Says Higher Manufacturing Costs Have Plagued the B-21
The earnings call from the company was not good news for Wall Street analysts. Kathy J. Warden, Northrop Grumman’s chair, chief executive officer, and president, said the company was spending so much on the program because it needed to meet optimistic production goals.
The $477 million pre-tax loss was “largely relating to higher manufacturing costs” for the B-21, “primarily resulting from a process change we made to enable a higher production rate, as well as increases in the projected material cost, some of which are related to macroeconomic impacts on material prices,” Warden said.
Inflation Has Played a Negative Role
Warden blamed inflation for the program’s price creep. She believes the B-21 is still meeting production expectations, even though price over-runs have been a factor.
“We continue to make solid progress on the program, demonstrating performance objectives through tests, and we are progressing through the first two lots of production with significant learning behind us. We are ready to deliver to the Air Force this highly capable strategic deterrent during the quarter,” Warden explained.
The leader of the company said an undisclosed process change meant that high expenditures will not have to be made again–a statement that should soothe some investors who are looking for a peek into the future of the B-21 program. There won’t be another need to take such a drastic write-off on the build-out in future years, Warden claimed.
Evaluation and Testing Is Going According to Plan
The B-21 continues to chug along in testing. One bomber made its first flight in 2023, and the Raider was shown off to the public last December. Testing and evaluation are being conducted at Edwards Air Force Base in California. Northrop is now working through the engineering and manufacturing development phase of the program.
The Air Force has been tight-lipped about the overall costs it has sunk into the B-21, but in FY 23 the total costs to the government were estimated at $203 billion.
The B-21 is a high priority to replace the B-2 Spirit and B-1B Lancer. The 21st century threat environment has changed, from a focus on the Global War on Terror to the danger of a great power war. China and Russia have sophisticated air defenses. They also have several sixth-generation fighter and bomber programs. The B-21 needs to arrive in the 2030s for the U.S. Air Force to keep up.
It is natural for a defense contractor to have some sunk costs as part of a new airplane program. Stealth warbirds like the Raider cost real money. But the expenses came as a shock to some investors, and Northrop’s stock price has declined 6 percent in the last month as a result.
Congressional watchdogs have likely perked up their ears at the news of the money invested and lost by the Raider’s prime contractor. The Air Force is all-in on bringing this project to fruition. It is a priority, along with the F-47 program. Those two stealth airplanes would make a formidable duo, evading radar on their way to a ground strike.
Further, the U.S. nuclear strategy depends on a dominant air component, and the B-21 will supply this capability in the 2030s. Northrop will just have to absorb some costs and tighten its belt for the future. The B-21 is greatly needed.
About the Author: Dr. Brent M. Eastwood
Brent M. Eastwood, PhD is the author of Don’t Turn Your Back On the World: a Conservative Foreign Policy and Humans, Machines, and Data: Future Trends in Warfare plus two other books. Brent was the founder and CEO of a tech firm that predicted world events using artificial intelligence. He served as a legislative fellow for U.S. Senator Tim Scott and advised the senator on defense and foreign policy issues. He has taught at American University, George Washington University, and George Mason University. Brent is a former U.S. Army Infantry officer. He can be followed on X @BMEastwood.
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