Northrop Revises Profit to Apply Costs From Ship-Work Stoppage
Northrop Grumman Corp. restated third-quarter profit after stopping work on two ships for a cruise company that filed for bankruptcy protection.
Earnings fell to $79 million, or 84 cents a share, from the $117 million, or $1.28, previously reported, Northrop said in a statement. Northrop said it applied $60 million in costs related to the stoppage to third-quarter results, requiring the revision.
Northrop Grumman stopped building the 1,900-passenger ships for American Classic Voyages Co., which is controlled by billionaire Sam Zell. American Classic filed for Chapter 11 protection Oct. 19 after failing to get a federal loan to complete the ships. It also sought continued funding from the U.S. Maritime Administration, which declined to guarantee it.
The stoppage affected 1,250 Northrop employees at its Pascagoula, Miss., shipyard. About 500 of those workers will be reassigned to other projects at the Ingalls shipyard and 200 will be transferred to the Avondale shipyard in Gulfport, Miss. Most of the remaining employees will be reassigned to Avondale’s operations in New Orleans.
Northrop shares fell $35 cents to close at $99.60 on the New York Stock Exchange.