Northrup Grumman Net Income Drops 22%

Northrop Grumman Corp. said Wednesday that third-quarter net income fell 22% on declining income from pension funds, but the warship and military electronics firm confirmed its earnings targets and said sales more than doubled thanks to the purchase of shipbuilder Litton Industries Inc.

A day after the Pentagon backed Northrop’s offer to buy Newport News Shipbuilding Inc. over General Dynamics Corp.’s bid, Los Angeles-based Northrop reported net earnings of $117 million, or $1.28 a share, for the quarter, down from $150 million, or $2.11, a year ago.

It said earnings excluding pension fund income rose 58% to $161million, or $1.79 a share.

Northrop derives about half of its net income from pension funds, making it unique among defense contractors and particularly vulnerable to weak stock markets.

“We remain on track to achieve our 2001 economic earnings target of $6.25 to $6.40 [a share] as well as double-digit economic earnings growth in 2002,” Chairman and Chief Executive Kent Kresa said.

Revenue rose to $3.6 billion from $1.7 billion a year ago, boosted by the addition of Litton, the largest builder of nonnuclear ships for the Navy, and growth in electronic systems and information technology.

Shares in Northrop rose $3.74 a share to close at $103.74 on the New York Stock Exchange.

At a Glance:

Other California company earnings, excluding one-time gains and charges unless noted:

* Allergan Inc., an Irvine maker of drugs for eye and skin care, said third-quarter profit rose 22%, bolstered by sales of its glaucoma and neuromuscular drugs. Net income rose to $66.8 million, or 50 cents a share, from $54.6 million, or 41 cents, a year earlier.

Sales rose 9.7% to $418.8 million. Sales of Allergan’s muscle spasm medicine Botox rose 27% to $77.2 million, reflecting increased demand and expanded regulatory clearance for the drug.

* Home health-care provider Apria Healthcare Group Inc. of Costa Mesa posted earnings of $19.1 million, or 34 cents a share, for the third quarter, up 29% from $14.8 million, or 28 cents, a year ago. Analysts had anticipated earnings of 33 cents a share, according to Thomson Financial/First Call. Revenue climbed 12% to $284 million.

Apria also named James Baker chief financial officer. He had been vice president and controller.

* Dreyer’s Grand Ice Cream Inc. said third-quarter net income fell to $6.1 million, or 17 cents a share, from $11million, or 31 cents, a year earlier. Revenue for the Oakland-based company rose 22% to $420 million, helped by an agreement to distribute Unilever’s Ben & Jerry’s ice cream in all of the U.S. markets that Dreyer’s covers.

* Fidelity National Financial Inc., Irvine-based operator of the nation’s largest title insurance company, said third-quarter net income more than doubled to $84.1million, or 95 cents a share, from $37.6 million, or 49 cents, a year earlier. Revenue rose 27% to slightly more than $1 billion.

* Irvine lender New Century Financial Corp. said third-quarter profit more than tripled as homeowners refinanced mortgages at lower rates. Net income surged to $16.7 million, or 81 cents a share, from $4.7 million, or 24 cents, a year earlier. Revenue rose nearly 56% to $89.1 million.

* Newhall Land & Farming Co. reported third-quarter net income of $486,000, or 2 cents a share, contrasted with a net loss of $612,000, or 2 cents, a year ago. Revenue for the Valencia-based real estate developer fell 20% to $37.2 million.

* Specialty Laboratories Inc. reported third-quarter net income of $2.9 million, or 13 cents a share, compared with $2.4 million, or 14 cents, a year ago. Revenue at the Santa Monica clinical reference laboratory was $42.8 million, an increase of 8.3%.

* Unocal Corp. said third-quarter net income declined to $102million, or 42 cents a share, from $190 million, or 77 cents, in the year-earlier period. Sales at the El Segundo company, which explores for oil and natural gas in North America and Asia, fell 33% to $1.58billion.

* Thousand Oaks-based WellPoint Health Networks Inc., parent of Blue Cross of California and one of California’s biggest health insurers, said third-quarter profit rose 21%, beating estimates, as it added customers and raised premiums. Net income rose to $108.4 million, or $1.64 a share, from $89.5million, or $1.38, a year ago. Revenue rose 38% to $3.3billion. Analysts had expected WellPoint to earn $1.57 a share, according to a survey by Thomson Financial/First Call.