Northrop Reports 68% Decline in 4th Quarter

Northrop Corp. on Tuesday posted a 68% drop in its fourth-quarter net, primarily because of a $105.3-million writeoff to close out work on its F-20 Tigershark.

Northrop announced last November that it would halt further expenditures on the Tigershark and take the big writeoff. The aerospace company has spent more than $1.2 billion over four years to develop the F-20, but was unable to find any buyers at home or abroad.

For the full year, net income was down nearly 81%. Those results also included a $90-million third-quarter writeoff on a secret government contract, widely believed to be the Stealth bomber, because of lower-than-expected profit margins.

Northrop posted net income of $9.3 million on revenue of $1.66 billion for the three months ended Dec. 31, compared to a profit of $29.2 million on revenue of $1.53 billion a year earlier.

For the full year, the Los Angeles company earned $41.2 million on revenue of $5.61 billion, compared to 1985 when it posted a $214.4-million profit on revenue of $5.06 billion.

Northrop’s aircraft segment was down the most.

It showed an operating loss of $4.8 million in the fourth period, compared to a year-ago profit of $45.6 million. For the year, its operating profit plunged to $66 million from $348.3 million.

The company cited lower profit margins in early phases of certain classified programs, fewer aircraft deliveries and the phase-out of its maintenance services program in Saudi Arabia.

Northrop’s electronics unit made a stronger showing, with operating profits rising 6.4% to $36.8 million for the quarter and 18.7% to $99.7 million for the year.