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Litton Quarterly Earnings Are Below Expectations

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From Bloomberg News

Litton Industries Inc. on Wednesday said its fiscal fourth-quarter earnings rose 3.2%, below analysts’ expectations, hurt by weak results in its Navy shipbuilding business.

The Woodland Hills-based defense contractor and commercial electronics maker said net income rose to $44 million, or 93 cents a share, for the quarter ended July 31, from $42.7 million, or 89 cents, a year ago. The company was expected to earn 95 cents a share.

Litton shares still rose $2.25 to close at $53.13 on the New York Stock Exchange, as analysts said investors were looking ahead to the next two years, when Litton will benefit from defense businesses it recently bought.

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The earnings disappointment “didn’t faze me,” analyst Eric Hunter of Standard & Poor’s said. “They’re still integrating recent acquisitions. The cost-reduction effects of those haven’t come into play yet.”

During the last year, Litton bought Science Applications International Corp.’s portable-computer business for an undisclosed amount, Racal Electronics’ marine electronics businesses for $49 million, Sperry Marine Inc., a maker of marine navigation and guidance systems, for $158 million, and PRC Inc., a computer-network consulting company, for $425 million.

Litton’s military-electronics business got a boost Wednesday as Textron Inc. selected the company to build avionics systems that will be installed in Textron helicopters used by the U.S. Marine Corps. In a statement, Litton said U.S. and foreign military sales of the systems could eventually exceed $650 million.

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