Litton Net Falls 25%; Drop in Oil Services Profit Cited

Litton Industries Inc., Beverly Hills, said Thursday that its earnings dropped 27% in the second quarter and 25% for the six months, primarily because of lower profits from its oil services unit and lower interest income.

Litton reported net income of $34.1 million on revenue of $947.5 million for the three months ended Jan. 31, compared to a year earlier when it earned $47 million on revenue of $1.17 billion.

For the half, Litton posted a $68.4-million profit on revenue of $2.04 billion, compared to the first six months of last year when it had a profit of $90.7 million and revenue of $2.27 billion.

The oil industry slump took a heavy toll on its resource exploration services unit, which had sharply lower revenue and operating profit.

Depressed results from that unit were primarily responsible for driving down operating profits in Litton’s industrial systems and services division by 44% to $12.7 million for the quarter and $23.2 million for the half.

Earlier this week, Litton agreed to put its resources group into a Houston-based joint venture with the Atlas unit of Dresser Industries Inc. Litton will control about two-thirds of the venture.

Because of lower interest rates and less cash to invest, Litton’s net interest expenses rose 365% to $10.9 million for the quarter and 412% to $20.5 million for the half.

Besides the oil services industry, Litton is involved in advanced electronic and defense systems, industrial automation and geophysical services.