Litton Net Slides 76% in Year, 60% in Quarter

Litton Industries said Thursday that its net income was off 76% for the year and 60% in the fourth quarter, primarily due to writeoffs, depressed oil prices, foreign competition in its microwave oven business and interest expenses.

For its full fiscal year, the company netted $71.1 million on revenue of $4.52 billion, compared to fiscal 1985, when it earned $299.5 million on revenue of $4.59 billion. Litton earned $30 million on revenue of $1.14 billion for its fourth quarter ended July 31, compared, to a year earlier, when it had a profit of $76.1 million on revenue of $1.12 billion.

Fourth-quarter results included a $17-million settlement by its Clifton Precision special devices division, which pleaded guilty to defrauding the government and covering up a practice of lying about how much it cost to produce military equipment.

That settlement came on the heels of a third-quarter writeoff of $49 million on its Saudi Arabian air defense program. The Clifton and Saudi operations are both in Litton’s advanced electronics division.

Operating earnings of the advanced electronics unit were off by 61% in the fourth quarter to $22.4 million and by 47% to $116.8 million for the year.

The company’s industrial systems and services division continued to be hurt by depressed oil and gas prices, showing a fourth-quarter operating profit of $16.7 million, compared to $41.5 million a year earlier.

For the full year, that division showed a loss of $30.3 million, which included a $110-million reduction in the value of assets. In 1985, that division earned $142.7 million.

Intense foreign competition continued to plague Litton’s microwave oven business, a major part of its “other commercial products,” which showed a profit for the year of $520,000, compared to 1985, when it earned $10.1 million.

Litton’s had $13 million in interest expense for fiscal 1986, compared to $128.3 million in interest income for the previous year.