Northrop Grumman Corp (NOC) said on Tuesday third-quarter profit fell slightly after Hurricane Katrina caused delays at the No. 2 U.S. defense contractor's Gulf Coast (search) shipyards.

Northrop, which builds warships at yards in New Orleans, and Pascagoula and Gulfport, Mississippi, suffered about $1 billion in damage from the hurricane, but said it expects to get back to a normal schedule within 12 months.

In an effort to improve its per-share performance, the Los Angeles-based company said it would buy back up to $1.5 billion worth of its shares, or nearly 8 percent of its outstanding shares, within the next 12 to 18 months.

Northrop, which builds destroyers, nuclear-powered submarines, navigation systems, missiles and unmanned spy planes, reported quarterly profit from continuing operations of $288 million, or 80 cents per share. That compares with $291 million, or 80 cents per share, in the year-earlier quarter. Revenue was flat at $7.4 billion.

That beat Wall Street's forecast for profit of 70 cents per share, according to Reuters Estimates. Revenue missed analysts' average forecast of $7.6 billion.

Northrop warned earlier this month that damage and delays caused by Katrina (search) would cut earnings. The company slashed its full-year earnings forecast two weeks ago, but nudged it upward Tuesday to a range of $3.60 to $3.70 per share. Analysts are expecting $3.67, on average.

Northrop repeated its forecast of $30.5 billion to $31 billion. Analysts are expecting $30.9 billion, on average.

The company kept its 2006 profit and revenue forecasts unchanged.

Northrop shares are down about 1 percent so far this year, lagging by far the 9 percent rise in Standard & Poor's Aerospace & Defense index (search). Northrop shares are trading at about 13 times forecast 2005 earnings, compared with an average of about 16 times for rivals, partly because of the company's slow-growing shipbuilding business.