Northrop Grumman Profit Jumps 10% in Quarter
Northrop Grumman Corp. said Wednesday that its third-quarter profit grew a far-better-than-expected 10% on strength in its information-technology business and higher pension income.
Northrop posted net income of $128 million, or $1.83 a share, up from $116 million, or $1.67, in the year-earlier period. Sales declined 4% to $2.12 billion.
The results beat the average analyst estimate of $1.63, published by First Call Corp., as well as unpublished estimates of as much as $1.71.
Northrop, maker of the B-2 stealth bomber, has been buying information-technology businesses during the last two years to offset cuts in defense spending worldwide. It said the biggest of these businesses, the Logicon unit it bought in 1997, saw profit soar 77% on a 46% jump in sales.
Logicon won new contracts to support base operations for the National Aeronautics and Space Administration and the U.S. Air Force.
Northrop also benefited by slashing corporate expenses by 67% from a year ago.
The gains in information technology and a 37% jump in pension income offset declining sales in Northrop divisions that make commercial-aircraft parts and electronic sensors.
Fewer airlines in Asia are buying jetliners as they cope with the lingering effects of a slump in the region’s economy. That has forced Boeing Co. to cut production of the 747 jumbo jet, for which Northrop makes the fuselage. Northrop had seven 747 deliveries compared with 13 in the year-earlier quarter.
Shares in the Los Angeles-based company rose 44 cents to close at $54.88 on the New York Stock Exchange.
At a Glance
Other aerospace industry earnings, excluding one-time gains or charges unless noted, include:
* TRW Inc. said third-quarter profit from operations jumped 30% to $145.9 million, or $1.18 a share, well above analyst expectations of $1.10 a share, as the company got a big boost from its May acquisition of car-brake manufacturer LucasVarity. Sales surged 57% to $4.46 billion. The space and defense unit’s operating profit rose 43% to $160.1 million on a 33% jump in sales to $1.5 billion. The company said aerospace profitability is expected to remain stable in the fourth quarter.
* General Dynamics Corp. said its profit from operating grew 15% in the third quarter to $182 million, or 90 cents a share, a penny higher than estimates, on higher sales of submarines and ships and strong results from its new business-jet division. Revenue grew 23% to $2.22 billion. The information systems and technology division’s operating profit climbed 67% on a 57% jump in sales. In the marine unit, which builds destroyers and submarines, operating profit rose 21% on a 33% rise in sales. The Gulfstream business-jet unit’s operating profit rose 23% and sales were up 13%. The results exclude a one-time gain of $81 million and charges totaling $79 million, in part from the acquisition of Gulfstream.
