Al Root and Mackenzie Tatananni

Northrop Grumman stock tumbled in premarket trading Tuesday after the aerospace and defense contractor cut its full-year guidance and reported earnings that missed analysts' expectations.

First-quarter earnings of $3.32 a share fell from the prior year and missed the $6.24 a share Wall Street had anticipated. Sales fell 7% from the previous year to $9.5 billion and were below analysts' estimates of $9.9 billion.

Shares of the aerospace and defense contractor were down 8% at $489, while S&P 500 and Dow Jones Industrial Average futures were up 0.9% and 0.7%, respectively.

Management partially attributed the sales miss to a "previously disclosed wind-down of work on certain Space Systems programs." The company also acknowledged a pretax loss of $477 million in the quarter, citing higher manufacturing costs within its B-21 Raider stealth bomber program.

Northrop Grumman slashed its outlook for segment operating income and adjusted earnings for 2025. The company said it expects operating income in the range of $4.2 billion to $4.35 billion, down from a prior range of $4.65 billion to $4.8 billion. Management guided for adjusted earnings of $24.95 to $25.35 a share, versus an earlier forecast of $27.85 to $28.25 a share.

The company reaffirmed its sales and free cash flow guidance for the year. In January, management forecast 2025 sales of $42 billion to $42.5 billion, free cash flow of $2.9 billion to $3.3 billion, and profit of $27.85 to $28.25 a share.

Despite the earnings miss and guidance cut, CEO Kathy Warden said global demand for the company's products remained strong, citing a record backlog of $92.8 billion.

Coming into Tuesday, Northrop stock has risen 4% since the Nov. 5 presidential election, about 14 percentage points better than the S&P 500.

Write to Al Root at allen.root@dowjones.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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April 22, 2025 07:29 ET (11:29 GMT)

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