Northrop Profit Jumps 23%
Northrop Grumman Corp. said Wednesday that earnings climbed 23% in the latest quarter because of higher margins in certain businesses, and sales boomed 28%, propelled by the acquisition of Grumman Corp.
For the second quarter, the giant defense-aerospace firm posted profit of $65 million, or $1.33 a share, compared to earnings of $53 million, or $1.12 a share, a year earlier. Sales increased to $1.68 billion from $1.3 billion in 1993.
Northrop said without the Grumman acquisition in the second quarter, sales would have declined 13% because of fewer contracts for planes.
The company said the purchase of Grumman, as expected, was basically neutral to earnings in the second quarter, but it expects the acquisition to boost results starting in 1995.
The Los Angeles-based company said the Grumman purchase also boosted its order backlog to $12 billion from $7 billion a year ago.
Northrop Grumman said the higher earnings reflect improved operating margin in its electronics countermeasures business and a slightly higher profit margin on the B-2 bombers. Overall operating margin rose 43% to $133 million.
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AirTouch Communications, formerly the cellular arm of Pacific Telesis Group, said it earned $33.1 million in second-quarter profit, nearly triple its year-ago performance.
AirTouch earned 7 cents a share in the quarter ended June 30, its first as an independent company. It earned $12.5 million, or 3 cents a share, in the same period a year ago.
Revenue was $279.2 million, up 8% from $259.5 million a year ago.
“Our second-quarter results confirm that we’re building a strong foundation that will enable us to continue performing successfully in an increasingly competitive industry,” Chairman and Chief Executive Sam Ginn said.
AirTouch said it has 2.9 million customers for its cellular and paging services in the United States and 10 other countries, including Germany, Italy, Japan, South Korea and Thailand. It holds a minority stake in the overseas ventures.
General Motors Corp.’s defense-electronics and data-processing subsidiaries reported improved second-quarter results Wednesday because of increased demand for their products and services. GM’s financing business said profit declined, largely because of reduced mortgage financing.
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GM Hughes Electronics said it earned $267.3 million, or 67 cents per GM Class H share, up 15% from $232.0 million, or 58 cents a share, the year before. Revenue totaled $3.54 billion, up 7% from $3.32 billion.
C. Michael Armstrong, chairman and chief executive of the Los Angeles-based subsidiary, said the improvement reflects growth in some of the non-defense segments of the company, particularly automotive electronics. Although production volumes for missiles such as the Stinger and Tomahawk fell, the company’s defense business improved its profitability because of cost reductions.
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Electronic Data Systems posted an 11% increase in earnings on a 12% rise in revenue as the company won $3.9 billion in new contracts in the second quarter.
EDS earned $197.3 million, or 41 cents per Class E share, on revenue of $2.33 billion, up from $178.1 million, or 37 cents a share, on revenue of $2.1 billion in the second quarter of 1993.
The Plano, Tex.-based data processor said it signed $6.02 billion in new contracts in the first half of this year, up from $7.03 billion in all of 1993, the best year in EDS history.
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Detroit-based General Motors Acceptance Corp. earned $216 million in the second quarter, down 24% form $285 million earned the year before. GMAC attributed most of the decline to a reduction in both financing and insurance operations, notably mortgage results, a reflection of the industrywide decline in mortgage originations because of rising interest rates.
The finance subsidiary financed or leased 333,000 new vehicles in the second quarter, 16% below the year-earlier results. Outside the United States, GMAC financed or leased 177,000 new vehicles, up 24% from 143,000 the year before.
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Bethlehem Steel Corp. announced a $26-million second-quarter profit, saying increases in basic steel operations helped it recover from a $14-million loss a year ago.
The profit equals 14 cents a share and contrasts with a loss of 27 cents a share for the second quarter a year ago. Sales for the period were $1.23 billion, up 10% from $1.12 billion in the year-ago period.
The Bethlehem, Pa.-based company said profit was hurt by the cost of modernizing its Burns Harbor plant and an increase in contributions to employee pension funds.
The earnings for the second quarter reflect strong demand from the automotive, machinery and light-construction markets, the company said.
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DuPont Co., the nation’s biggest chemical company, reported record second-quarter earnings of $792 million, up 53% from the same period a year ago.
