LOS ANGELES – Defense contractor Northrop Grumman Corp.'s (NOC) third-quarter earnings rose 51 percent due to strength from its mission systems, integrated systems and ships and space technology segments.
The Los Angeles company Wednesday said its third-quarter earnings increased to $278 million, or 76 cents a share, from $184 million, or 50 cents a share, in the third quarter a year earlier.
Income from continuing operations for the latest quarter was $291 million, or 80 cents a share, which beat analysts' average forecast of 77 cents a share. In the year-ago period, income from continuing operations was $200 million, or 54 cents a share.
Third-quarter sales increased 11 percent to $7.4 billion from $6.7 billion, topping Wall Street projections of $7.25 billion.
Northrop reclassified its component-technologies business as a continuing operation, abandoning an effort to sell the unit and putting it back on the company's books after classifying the business as a discontinued operation in the third quarter of 2002.
Northrop, which is the world's largest shipbuilder and the second largest defense contractor in the United States, said its ships business continued to be a source of strength, with sales rising 14 percent. Information technology (search) revenue rose 8 percent, while mission-systems (search) sales rose 21 percent.
Pension expenses, which have troubled many U.S. manufacturers in recent years, declined to $87 million from $143 million last year.
The company also said it expects full-year 2004 sales in excess of $29 billion versus previous guidance of approximately $29 billion. Analysts, on average, expect Northrop Grumman to report sales of $29.24 billion in fiscal 2004. In fiscal 2003, the company had sales of $26.21 billion.
The company now expects 2004 per-share earnings from continuing operations of $2.95 to $3.00 versus previous guidance of $2.90 to $3.00. Wall Street currently expects the company to earn $3 a share, before items, in fiscal 2004. In fiscal 2003, Northrop Grumman reported income from continuing operations of $2.16 a share on a post-split basis.
For 2005, Northrop expects sales of approximately $31 billion. Wall Street analysts currently expect sales of $31.35 billion.
Northrop's board of directors also approved a large buyback of Northrop stock. The repurchase is expected to be completed over the course of 12 to 18 months, beginning in November of this year.