Northrop, Rockwell Post Gains : Profits at Aerospace Firms Boosted by Defense Contracts

The continued bounty for defense contractors was evidenced Tuesday as two major aerospace companies reported higher quarterly profits: Northrop said its first-quarter net income rose nearly 47%, while Rockwell International said its second-quarter profit climbed 16.5% from the year-ago period.

At Northrop, which makes F-5 tactical fighters and jointly manufactures the F-18 fighter jet, net income for the three months ended March 31 was $45.5 million, up from $31 million in the first quarter of 1984.

Higher demand for its commercial and military aircraft boosted sales 34% to $1.1 billion from $814.9 million in the year-ago quarter, the company reported.

Rockwell’s second-quarter net income of $154.6 million was a record for the Pittsburgh-based company. It was up from earnings of $132.7 million in the like quarter a year ago.

Rockwell’s sales rose to $2.8 billion, a 23% jump from sales of $2.3 billion posted in the 1984 second quarter.

Rockwell, which employs about 44,500 workers in Southern California, said earnings of its aerospace division increased 31% to $130.8 million from the $99.5 million that the division earned in the 1984 quarter.

The company said the growth was sparked primarily by the government’s increased spending for the B-1B bomber program.

But Rockwell also said income in its electronics division, up 76% from the year-ago period, helped boost total earnings. Income for that division totaled $98.3 million on sales of $841 million.

Northrop, however, said increased investments in new programs brought down earnings in its electronics business segment.

The company said its overall higher earnings reflected increased deliveries of its commercial and military aircraft products and a higher level of customer-sponsored research and development.

Northrop also said it has reduced expenditures in its F-20 Tigershark program. The company has yet to sell any of the Tigershark fighter jets, which it designed and developed on its own. It has submitted a formal proposal to the Pentagon to sell it 396 of the jets in the next four years.

The first-quarter results, the company said, do not include settlement of a six-year battle with McDonnell Douglas over foreign sales of the F-18 Hornet, a fighter jet made jointly by the two companies. As part of that settlement, McDonnell is to pay $50 million to Northrop.