Why Northrop Grumman (NOC) Shares Are Getting Obliterated Today

What Happened?

Shares of security and aerospace company Northrop Grumman (NYSE:NOC) fell 14.6% in the afternoon session after the company reported weak results for the first quarter of 2025: sales came in lower than expected, and profits fell well short of what Wall Street was hoping for. 

What stood out was a big hit in its aircraft business: Northrop booked a $477 million loss on its B-21 bomber program, due to rising costs from production changes and higher material prices. As a result, margins took a hard fall. 

The top line wasn't any better. Total sales dropped 7% from the previous year, mostly because of big declines in its space and aircraft units, as older programs wound down and new ones didn't ramp up fast enough. This led to earnings per share falling significantly, even though parts of the business like Mission and Defense Systems grew. 

Looking ahead, Northrop stuck to its full-year sales and cash flow outlook, but it cut its profit forecast by more than 10%. It also struck a cautious tone around trade tariffs. 

Overall, the quarter came up short. 

Separately, competitor Raytheon reported weak earnings and gave underwhelming guidance, raising concerns about the defense sector's ability to hold up amid escalating trade tensions.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Northrop Grumman? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Northrop Grumman’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. Moves this big are rare for Northrop Grumman and indicate this news significantly impacted the market’s perception of the business.

Northrop Grumman is down 3% since the beginning of the year, and at $454.08 per share, it is trading 16.5% below its 52-week high of $543.88 from September 2024. Investors who bought $1,000 worth of Northrop Grumman’s shares 5 years ago would now be looking at an investment worth $1,328.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. We prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.