Mixed results for aerospace
Northrop Grumman Corp. on Wednesday said it posted lower third-quarter profit because of higher pension expenses, but the results surpassed analysts’ expectations and the company lifted its profit outlook for the year.
In contrast, Boeing Co. said it lost $1.6 billion in the quarter, hurt by growing costs of two troubled plane programs that forced the airplane maker to slash its profit forecast.
The world’s second-largest commercial plane maker after Europe’s Airbus, Boeing has struggled to launch its 787 passenger jet and a revamped version of its classic 747 jumbo jet. Production delays, parts shortages and last-minute fixes have cost the company billions in write-downs along with additional design and manufacturing expenses.
Northrop and Boeing are two of the region’s largest private employers, with a combined workforce of more than 50,000 in Southern California.
Northrop, with headquarters in Century City, bumped its 2009 earnings estimates to between $5 and $5.15 a share. Previously, Northrop projected income of $4.65 to $4.90 a share for the year.
“This was another solid quarter for Northrop Grumman, continuing our focus on managing risk, improving performance and driving growth,” said Ronald D. Sugar, Northrop’s chairman and chief executive.
The rosy outlook comes amid prospects of a slowdown in Pentagon spending on military hardware, such as fighter jets and warships.
Northrop’s net income dipped about 4% to $490 million, or $1.53 a share, from $512 million, or $1.51 a share, a year earlier.
The company made $586 million in contributions to its pension plan in the third quarter. It did not incur the same cost last year.
Last month, Sugar announced he would step down as chief executive in January and stay on as an advisor until June. Company President Wes Bush will replace him.
For Boeing, sales edged up 9% during the quarter, but profits took a big hit because the Chicago company booked charges of more than $3.6 billion for its two plane programs.
They “clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business,” Boeing Chief Executive Jim McNerney said in a statement after the results were announced Wednesday.
They also led the company to cut its 2009 profit forecast to $1.35 to $1.55 a share from $4.70 to $5 a share.
Boeing’s quarterly loss amounted to $2.23 a share, compared with earnings of $695 million, or 96 cents a share, a year earlier.
Quarterly revenue rose to $16.69 billion from $15.29 billion a year earlier.
But the comparison was made easier by a labor strike and supplier problems last autumn, which sliced $2.1 billion off revenue.
Sales from Boeing’s military business, which makes fighter jets, satellites and security systems, rose 3%.
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The Associated Press was used in compiling this report.
