Northrop Grumman 1st-qtr profit up nearly 50%
Two of the nation’s largest aerospace companies reported sharply contrasting first-quarter financial results Wednesday as Boeing Co. said its earnings fell by half while Northrop Grumman Corp. posted a 48% jump in profit.
The results reflected the shifting fortunes of the two companies. Boeing, the world’s largest maker of commercial aircraft, has been hit hard by a recession-induced slump in air travel that has reduced demand for new planes.
On the other hand, Century City-based Northrop, which generates about 80% of its revenue from military contracts, has been buoyed by the continued uptick in Pentagon spending. In recent weeks, Pentagon planners have called for buying more Northrop robotic planes and sophisticated surveillance electronic equipment.
Northrop and Boeing -- which also has a large military-related business in the region -- are among the largest private employers in Southern California with more than 52,000 workers.
“We’re pleased with our first-quarter financial results, and we’re confident that our products and capabilities continue to be extremely well aligned with current and emerging national security priorities,” Northrop Chairman Ronald D. Sugar said.
Northrop said it was raising its 2009 earnings estimate to a range of $4.65 to $4.90 a share from $4.50 to $4.75. The company also said it expected to record a pretax gain of as much as $70 million in the second quarter tied to a previously announced legal settlement with the U.S. government.
In the first quarter, Northrop posted profit of $389 million, compared with $263 million a year earlier. Revenue climbed 8% to $8.3 billion on increased sales across all of its business segments. The company makes military ships, aircraft, satellites and electronic equipment.
Northrop shares fell 10 cents to $47.78.
Meanwhile, Boeing, citing the slump in commercial aircraft demand, said it was slashing its profit forecast for the year by 35 cents to a range of $4.70 to $5 a share.
But the cut was not as large as analysts were expecting. Boeing shares rose 65 cents to $37.30.
For the first quarter, Boeing said profit fell 50% to $610 million, despite a 3% increase in revenue to $16.5 million. Earnings were hurt by lower aircraft prices, charges related to development problems with a new a version of the 747 jumbo jet and by a production rate cut for its wide-body 777 aircraft.
Boeing has a record backlog of orders for airplanes, but it has been cutting back on production of certain aircraft as airlines have been deferring or canceling orders. The company said that customers deferred delivery of 60 airplanes and that it anticipated another 60 deferrals.
It also said customers canceled orders for 32 of its new 787 aircraft, which isn’t expected to enter first service until next year. It still has orders for 886 of the 787 planes from 57 customers.
“The expanded global economic downturn is presenting unprecedented challenges in our commercial airplane markets,” Boeing Chairman Jim McNerney said.
--
