Warden said Northrop Grumman is investing in two related tactical missile programs. They are the Navy’s AARGM-Extended Range and the Air Force’s Stand-in Attack Weapon, or SiAW.
The company recorded higher projected costs for SiAW qualification testing during the quarter. Warden linked those costs to testing delays on AARGM-ER that affected the SiAW design and qualification schedule.
“As we mature production on the AARGM-ER program, which is the basis of the technology for Stand-in Attack Weapon, we have had some delays in testing that have resulted in a flow-through to the schedule for design and qualification on the Stand-in Attack Weapon,” Warden said. “So we look at those 2 programs collectively as part of our tactical missile growth strategy.”
Warden said Northrop Grumman has added resources and improved integration laboratory facilities to accelerate testing. She also pointed to demand from U.S. and international customers for the two missile programs.
“They’re very much in high demand. One program’s for the U.S. Navy, the other for the U.S. Air Force, and we have international customers that are looking to get these missiles in their hands,” Warden said.
Warden said AARGM-ER and SiAW represent billions of dollars in potential sales over the next decade. Northrop Grumman expects those sales to carry accretive margins after the programs complete qualification and move further into production.
PAC-3 is another focus of Northrop Grumman’s missile expansion, according to Warden. She said the company completed qualification activities in Q2 to become a solid rocket motor supplier for the program.
Northrop Grumman also reached a $2 billion framework agreement with the U.S. government and Lockheed Martin. Warden said a PAC-3 solid rocket motor production award is expected later in 2026.
“We have production capacity, and we are starting to build,” Warden said during the call. “And we are doing that even ahead of definitized contract later this year, so that we can support the increased demand for the program.”
Warden said a larger PAC-3 production contract is expected later this year. Funding is expected through appropriations tied to the fiscal 2027 budget.
Northrop Grumman will initially hold a smaller PAC-3 production position as a new supplier. Warden said successful early deliveries could allow that position to grow over time.
“So Scott, at first, because we are a brand-new supplier, we will start at a smaller scale, and that will grow over time,” Warden said. “I’m not at liberty to share exact quantities with you, but just sufficient to say, we are focused on performing in these early production deliveries and believe that in doing so, that will gain us the credibility to continue to scale.”
Beyond PAC-3, Warden said Northrop Grumman has 10 multi-year missile acceleration agreements in work. Those agreements represent up to $10 billion in potential sales over the next seven years.
Warden said pricing and fee negotiations remain ahead with government and prime-contractor customers. She said Northrop Grumman has already invested in production capacity for many of the opportunities.
“In many cases, we have invested so that we have capacity available now,” Warden said. “And we have gotten through qualification, which means we understand what we need to build, and these will look more like mature production programs.”
