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Shares of major U.S. defense contractors tanked Tuesday, with Northrop Grumman (NOC) and RTX (RTX) ranking among the S&P 500’s steepest decliners after earnings reports flagged cost overruns, shrinking margins, and rising tariff exposure — even as revenue remained strong.
RTX, for its part, warned that if current trade policies remain in place, tariffs could slash its 2025 operating profit by as much as $850 million, amplifying investor concern across the sector.
Northrop Grumman dives 13%
Northrop Grumman led the sector selloff Tuesday, tumbling 13% after posting a steep 49% decline in first-quarter profit. The blow came largely from a $477 million charge tied to surging manufacturing costs on its next-generation B-21 Raider stealth bomber program.
Net income fell to $481 million, or $3.32 per share, down from $944 million, or $6.32 per share, a year earlier. Revenue slid 7% to $9.47 billion. While the company reaffirmed its full-year sales outlook, investors were clearly spooked by margin compression and trimmed earnings guidance.
RTX slides 9% on $850 million tariff threat
Shares of RTX (formerly Raytheon Technologies) dropped 9% after the company posted solid results — but delivered an unwelcome warning. First-quarter revenue rose 5% to $20.3 billion, while adjusted net income climbed to $1.99 billion, or $1.47 per share, from $1.79 billion, or $1.34 per share, a year ago.
Despite the headline beat, executives said continuing tariffs could shave more than $850 million from 2025 profit, citing exposure to metal tariffs and cross-border trade disputes. The company held its full-year guidance but acknowledged that doesn’t yet fully reflect the potential impact of trade policy uncertainty.
Lockheed up just 1% despite strong demand
Lockheed Martin (LMT) held up better, climbing 1% after reporting stronger-than-expected earnings. First-quarter revenue rose 4% to $18 billion, powered by continued demand for its missile systems and F-35 fighter jets.
Net income rose to $1.7 billion, or $7.28 per share, up from $1.5 billion, or $6.39 per share, a year earlier. Lockheed reaffirmed its full-year outlook and pointed to long-term support from rising global defense budgets.
GE Aerospace climbs 5%
In contrast, GE Aerospace (GE) rallied nearly 5% after delivering a beat. The company reported $9.94 billion in revenue and $1.49 in adjusted EPS, both ahead of analyst expectations.
CEO Larry Culp cited continued strength in maintenance demand as airlines keep older aircraft in service amid persistent Boeing and Airbus delivery delays.