NEW YORK – Defense contractor Northrop Grumman Corp. (NOC), which has large shipbuilding operations on the Gulf Coast, said on Monday damage and work delays caused chiefly by Hurricane Katrina (search) would cut expected full-year profit by about 9 percent.
Northrop, which builds warships at yards in New Orleans and at Pascagoula and Gulfport in Mississippi, is the only defense contractor expected to announce significant impact from the storms which swept across the Gulf Coast in late August and September.
Predicting a return to a normal working schedule within nine to 12 months, and no loss of work from its backlog, Northrop kept its 2006 profit forecast intact.
"This is largely expected and should not be taken too negatively," said Banc of America analyst Nick Fothergill, in a research note.
Northrop's shares were down 21 cents at $53.83 on the New York Stock Exchange (search).
The company, which has 11 ships under construction at its Gulf Coast yards, said it incurred about $1 billion in hurricane damage, most of it insured.
It said about 12,500, or roughly two-thirds, of its 19,800 work force in the region were already back at work. It said a further 3,000 were on some form of approved leave and about 3,600 had made contact with the company but were not yet able to return to work. It said 700 workers were still unaccounted for.
Northrop said work delays and higher material and labor costs caused by the hurricanes would lop about 40 cents per share off 2005 earnings, not counting any reimbursements from the U.S. government to offset higher costs, or proceeds from business interruption insurance.
It said it now expects full-year 2005 earnings per share of $3.55 to $3.65 compared with a previous forecast of $3.90 to $4.00. Wall Street was expecting $3.95, on average, according to Reuters Estimates.
Northrop said it now expects 2005 revenue of $30.5 billion to $31 billion compared with previous guidance of $31 billion to $31.5 billion. Wall Street was expecting $31.2 billion.
For 2006, the company reiterated its forecast of $4.10 to $4.30 earnings per share, on revenue of $32 billion. Analysts are expecting earnings per share of $4.22, on average, on $32.5 billion revenue.