Latest news with #B-21s
Yahoo
23-04-2025
- Business
- Yahoo
Northrop loses $477M on B-21 bomber as it revamps production process
Northrop Grumman reported a $477 million loss on the B-21 Raider in the first quarter of 2025, as higher manufacturing and materials costs for making the sixth-generation stealth bomber squeeze the company. In a Tuesday statement on its financial performance, Northrop said much of the $477 million loss stemmed from a change the firm made to its B-21 production process, intended to allow the company to build the bombers at a higher rate. Northrop CEO Kathy Warden also said in an earnings call Tuesday with investors that macroeconomic factors are driving up the projected price of bomber materials. The loss encompassed all five low-rate initial production lots for the bomber. 'While I'm disappointed with this financial impact, we continue to make solid progress on the [B-21] program, demonstrating performance objectives through tests, and we are progressing through the first two lots of production,' Warden said. 'With significant learning behind us, we are ready to deliver [to] the Air Force this highly capable strategic deterrent.' The B-21 loss contributed to an overall $183 million loss in Northrop Grumman's aeronautics systems division. That division also recorded $2.8 billion in sales, an 8% decline from the first quarter of 2024. Overall, Northrop's profits dropped $498 million when compared to the first quarter of 2024, losing 46% of the $1.1 billion in operating income reported a year ago. Nearly all of that was due to the B-21 loss. Warden said the B-21 is completing its engineering and manufacturing development phase, and is now going through key tests to prove the bomber can carry out all of its objectives. Northrop Grumman is now working through the first two low-rate initial production, or LRIP, lots, she said, and has begun advance work known as long lead work on the third and fourth lots. 'We've built a good bit of experience now in building the aircraft,' Warden said, which is helping Northrop reduce the risk that comes with building a new, advanced aircraft. The Air Force and Northrop Grumman rolled out the B-21, which will eventually replace the B-1 Lancer and B-2 Spirit bombers, in December 2022, and the plane took its first flight the following November. The B-21′s development and testing have been relatively smooth, and multiple officials and lawmakers have praised it. But Warden has cautioned Northrop Grumman's investors since early 2023 that the company would likely initially lose money on the program and turn a profit later. The most recent losses followed a $1.6 billion loss that Northrop also reported on the B-21 in the fourth quarter of 2023. Former Air Force Secretary Frank Kendall also told lawmakers in April 2024 that the Air Force's costs for the plane were coming down as a result of negotiations with Northrop. At the time of the rollout, the B-21′s inflation adjusted average procurement unit cost was about $692 million. The Air Force plans to buy at least 100 B-21s but has left the door open to buying more bombers. The manufacturing changes that led to this year's losses are related to the lessons Northrop learned as it scaled up production, Warden said, and were made jointly with the Air Force. But those lessons will be absorbed and 'behind us' as Northrop finishes the LRIP phase and moves into full-rate production, she said. Warden said the process changes resulted in a larger share of the B-21 loss than the material costs. Northrop Grumman is also building the LGM-35A Sentinel intercontinental ballistic missile for the Air Force, which the service wants to replace the Cold War-era Minuteman III nuclear missiles. Warden also said the Air Force and Northrop Grumman in March conducted a successful static fire test of Sentinel's first stage solid rocket motor. But Sentinel is facing significant overruns in its projected future costs, stemming from higher-than-expected expenses in the construction of facilities such as launch centers. Northrop is continuing to work with the Air Force to find ways to bring down costs and make its schedule more efficient, Warden said . 'What we look at in [Sentinel's program] restructuring is to ensure that the changes and requirements are adequately reflected in the design and ultimately in the contract, and we'll be working to do that with the government,' Warden said. Sign in to access your portfolio
Business Insider
23-04-2025
- Business
- Business Insider
Northrop Grumman is taking a financial hit on its B-21 Raider stealth bomber
Northrop Grumman posted a drop in first-quarter profits, blaming higher manufacturing costs for its B-21 Raider stealth bomber. Sales totalled $9.5 billion in the quarter, down 7% compared to last year, the company said. Reuters reported that the figure was below the analysts' average expectation of about $9.92 billion. The company said it recorded a pre-tax loss of $477 million on its B-21 programs, and that investments to boost future B-21 production and higher-than-expected material costs were to blame. In a conference call, Kathy Warden, Northrop Grumman's president, said the drop was "largely relating to higher manufacturing costs" for the B-21, per The War Zone. She said it was "primarily resulting from a process change we made to enable a higher production rate, as well as increases in the projected material cost." She said Northrop Grumman had "underestimated the amount of consumption of both materials as well as the price increase that we are seeing." The B-21 is the first new stealth bomber to be developed for the US Air Force in 30 years, and took its maiden flight in November 2023. Business Insider reported last year that the plane is expected to form the backbone of the US bomber fleet, and that its state-of-the-art stealth capabilities are designed to evade sophisticated air defense systems. A low rate initial production contract — a contract for the manufacture of a small batch of B-21s for testing — was signed in January 2024. Gen. Anthony J Cotton, head of US Strategic Command, said last month that he wanted to see the Air Force boost the number of B-21s it plans to deploy from 100 to around 145. He said the plane's initial low production rate was set "when the geopolitical environment was a little bit different than what we face today." The B-21 is expected to enter service by the end of the decade. In the conference call, Warden said that the company was taking a financial hit now in order to be in a position to ramp up production of the plane going forward.
