NORTHROP GRUMMAN CORPORATION

Red flags

• The B-21 program has a remaining loss accrual of $1.3 billion, following a $1.56 billion projected loss recognized in 2023, an additional $477 million loss in Q1 2025, and $348 million of unfavorable 2025 EAC adjustments.
• Customer concentration is substantial: the U.S. government represented 84% of 2025 sales, leaving results exposed to appropriations, program cancellations, stop-work orders and acquisition-priority changes.
• Approximately half of 2025 sales came from fixed-price contracts, increasing exposure to inflation, labor shortages, supplier problems, technical issues and unrecovered cost growth.
• The company had $15.7 billion of long-term debt at December 31, 2025, while also carrying $547 million of accrued environmental remediation costs and $380 million of reasonably possible remediation costs above accrued amounts.
• The DOJ and DCMA matters concerning CAS pension interest-rate assumptions remain unresolved; the company states that a material adverse outcome is reasonably possible but cannot estimate the potential loss.