Litton Says Its 3rd-Quarter Profit Rose 20%
Litton Industries Inc. said its earnings rose 20% in its fiscal third quarter, primarily from the August acquisition of cargo shipbuilder Avondale Industries Inc.
The U.S. Navy’s third-biggest shipbuilder said profit from operations grew to $61.3 million, or $1.33 a share, for the period ended April 30, from $50.9 million, or $1.10, a year ago. Sales rose 11% to $1.4 billion. The earnings were in line with the $1.32-a-share average estimate of nine analysts surveyed by First Call/Thomson Financial.
The earnings performance helped push Litton shares up 38 cents to close at $42.94 on the New York Stock Exchange. They’ve dropped 15% so far this year.
Litton is considering ways to increase the company’s stock price, including the sale of some businesses, shutting down product lines or making acquisitions, Chief Executive Michael Brown said during a conference call, but did not provide details.
In its third quarter, Litton’s shipbuilding sales rose 65% and profit increased 54% because of the Avondale acquisition. The Woodland Hills-based company’s electronics unit also rebounded from a loss in its second quarter, when Litton was hurt by overruns on contracts to develop guidance and control systems.
“It’s good to see that business back on track,” said Keith Patriquin, an analyst with Loomis Sayles & Co. in Boston, which owned 1.2 million Litton shares as of March.
The company had a $10.6-billion backlog of work at the end of its third quarter, up from $10.4 billion at the end of the previous quarter. Litton was awarded a $477.7-million contract Tuesday to build an amphibious warfare vessel for the U.S. Navy. It is the fourth of 12 planned ships to be built.
Information systems sales fell 13% to $371.7 million as Litton sold some businesses and invested in new products.
Litton had a gain of about $500,000, or 2 cents a share, after the sale of its weather information and agricultural imaging businesses in its third quarter. That increased net income to $61.8 million, or $1.35 a share.
