By Utkarsh Shetti and Mike Stone
(Reuters) -Northrop Grumman posted a 49% drop in first-quarter profit and missed sales expectations on Tuesday, as the U.S. contractor booked losses on its B-21 stealth bomber program due to higher manufacturing costs, sending its shares down 10% in premarket trading.
The company, however, reaffirmed its sales forecast for the year, even amid growing concerns of uncertainty in the wake of U.S. President Donald Trump’s tariffs.
U.S. defense contractors, like other industries with complex manufacturing operations, are bracing for impacts from Trump’s trade war, which has pressured an already strained supply chain.
Although some experts have suggested that a higher defense budget would support backlogs and shore up revenues, countries upset with steep tariffs and constantly shifting policies are looking at moving away from American weapons and focusing on their own capabilities.
The European Union has outlined plans to shore up its own defense capabilities to reduce reliance on the U.S. by 2030, meaning any role for companies outside the bloc would be substantially limited.
Northrop, which makes the nuclear-capable B-21 Raider, posted first-quarter sales of $9.47 billion, down 7% from a year ago and below analysts’ average expectation of about $9.92 billion, according to data compiled by LSEG.
It reported a per-share profit of $3.32 on net income of $481 million, compared with the $6.32 per share or $944 million it posted a year ago.
The sharp decline stemmed from a $477 million hit from its B-21 program, which saw higher manufacturing costs as the company looks to ramp up production.
High startup costs associated with beginning B-21 production had been foreshadowed by the company, but as production ramps up the line is expected to become more profitable.
On an adjusted basis, the company reported a profit per share of $6.06 for the quarter, below expectations of $6.26.
(Reporting by Utkarsh Shetti in Bengaluru and Mike Stone in Washington; Editing by Saumyadeb Chakrabarty)
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