Northrop Net Up 140% in Quarter

Citing higher sales and operating margins from its fast-growing defense businesses and income from extraordinary items, Northrop reported a 140% increase in second-quarter net income.

The Los Angeles-based aerospace firm said net income in the quarter ended June 30 rose to $91.9 million from $38.3 million in the year-ago quarter. Sales rose 45% to $1.22 billion from $838.9 million.

Northrop said the increases resulted from greater sales volume and higher operating margins in the company’s aircraft, electronics and services business segments.

The firm said it also benefited from the previously announced receipt of $50 million from McDonnell Douglas under settlement of a suit. The settlement allows McDonnell Douglas to be the prime contractor on foreign sales of the F-18 Hornet fighter, while Northrop is the prime subcontractor.

Northrop also benefited from receipt of $34 million in insurance proceeds from the crashes of two of its four F-20 Tigershark aircraft and the resolution of other contractual issues regarding foreign F-18 sales.

Northrop said, however, that it made provisions for investments in top-secret advanced-technology projects. A company spokesman would not disclose the amounts of the provisions nor the identities of the advanced-technology projects, but aerospace analysts have noted that Northrop is spending millions to develop the stealth bomber.

The firm also made an undisclosed provision for inventory reductions related to its F-5 fighter program.

As of June 30, Northrop’s business backlog was $3.8 billion, up from $3.6 billion a year ago.