Northrop profit drops 20%

Northrop Grumman Corp.’s second-quarter profit dropped by 20% as the defense contractor said it was hurt by higher pension costs and higher estimates of costs to complete several ships being built in its Gulf Coast yards.

The company, which makes military aircraft and defense electronics, said Thursday that it earned $394 million, or $1.21 a share, in the three months ended June 30, down from $495 million, or $1.44, a year earlier. Revenue rose 4% to $8.96 billion.

Excluding a gain of $64 million, or 13 cents a share, for legal matters, and a $105-million charge, or 21 cents a share, for cost increases for ships under construction at Gulf Coast shipyards, Northrop Grumman said it would have earned $1.29 a share.

That matched the average earnings expectation by analysts surveyed by Thomson Reuters. Earnings estimates typically exclude one-time items.

Northrop’s revenue beat analysts’ forecast of $8.68 billion.

The Century City company, which is second to defense contractor Lockheed Martin Corp. in revenue, reiterated its 2009 outlook of $4.65 to $4.90 a share, which is below analysts’ forecast of $4.96.

As of June 30, Northrop received a total of $7.5 billion in new business awards, the same amount it received a year earlier.

Shares of Northrop fell 87 cents to $46.26.