Return
to Story Page
To print: Select File and then Print from your
browser's menu
Sarah Tippit
Los Angeles, July 16: Northrop Grumman Corp on Wednesday reported a 14 per cent drop in second-quarter profits, due primarily to charges totalling $37 million for previously announced plant closures and cost increases on its E-8C and E-2C surveillance aircraft.
The Los Angeles-based aerospace and defence company said its net income fell to $93 million, or $1.34 per share, from $108 million, or $1.59 per share, a year ago.
Sales were $2.1 billion, down from $2.2 billion.
In addition to an $8 million charge related to plant closures, electronics business segment operating profit for the second quarter was reduced $25 million by adjustments on the E-8C and E-2C programmes.
``Because of these charges the company now estimates diluted earnings per share for 1998 in the range of $6.50 to $6.75, not including merger-related expenses,'' Northrop chief financial officer Grumman Richard Waugh Jr said in a statement. For all of 1997, Northrop reported per share earnings of $5.98 on a diluted basis and net Los Angeles, July 16: Northrop Grumman Corp on Wednesday reported a 14 per cent drop in second-quarter profits, due primarily to charges totalling $37 million for previously announced plant closures and cost increases on its E-8C and E-2C surveillance aircraft.
The Los Angeles-based aerospace and defence company said its net income fell to $93 million, or $1.34 per share, from $108 million, or $1.59 per share, a year ago.
Sales were $2.1 billion, down from $2.2 billion.
In addition to an $8 million charge related to plant closures, electronics business segment operating profit for the second quarter was reduced $25 million by adjustments on the E-8C and E-2C programmes.
``Because of these charges the company now estimates diluted earnings per share for 1998 in the range of $6.50 to $6.75, not including merger-related expenses,'' Northrop chief financial officer Grumman Richard Waugh Jr said in a statement. For all of 1997, Northrop reported per share earnings of $5.98 on a diluted basis and netincome of $407 million.
Northrop said increases in operating profit in its aircraft and information technology and services businesses were more than offset by a decline in electronics operating profit, primarily due to the charges on the E-8C and E-2C programmes.
Northrop has agreed to be acquired by Lockheed Martin Corp in a deal valued at more than $10 billion, but the government has challenged the merger and a trial is set for September 8.
Northrop is confident about the strength of its position in a federal anti-trust lawsuit challenging its proposed merger with Lockheed Martin, Northrop's investor relations director,Gaston Kent said during a conference call.
``We are confident of the strength of the case ... clearly a negotiated settlement would be preferable,'' Gaston Kent, Northrop's investor relations director said during a conference call. He declined to comment further. The merged companies would emerge as the sole remaining competitor to aerospace giant Boeing Co which bought McDonnellDouglas Corp last year. Northrop would remain a strong competitor even if the deal fell through, Northrop spokesman Jim Taft said, adding the company is taking aggressive steps to increase profitability and efficiencies with or without Lockheed Martin,``I can tell you that we entered into the merger agreement with Lockheed Martin in the strongest position in our history,'' Taft said.
Northrop's business backlog at the end of the quarter was $11.1 billion, down from $12.8 billion a year earlier. The decline was due primarily to the winding down of the B-2 stealth bomber programme.
Northrop said its aircraft business operating profit was helped by the delivery of one B-2 bomber vs none in the year-ago quarter and an increase in pension income. These were partially offset by a decrease in B-2 business volume, lower operating margin rates on the F/A-18C/D Fighter plane and $4 million in plant closure charges. Northrop stock fell $2.375 to $103.06 in composite New York Stock Exchange trading.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------