Northrop Grumman Profit Up 44% to US$295 Million in Second Quarter

LOS ANGELES, July 29/Satnews Daily/ -- Northrop Grumman Corp. said its profit rose by 44 percent to $295 million in the second quarter compared to 205 million last year as the defense company posted higher sales. Sales for the second quarter of 2004 increased 11 percent to $7.4 billion from $6.6 billion for the same period of 2003.

Sales in the integrated systems unit rose 13 percent to $1.13 billion, while sales in the space technology business rose 14 percent to $836 million. Shipbuilding revenue also increased 14 percent to $1.56 billion, while the mission-systems group, which makes missile and command-and-control systems, posted revenue of $1.3 billion, up 18 percent.

For the first six months of the year, net income rose to $527 million from the prior year's $458 million. Operating margin for the 2004 second quarter increased 24 percent to $483 million from $391 million in the same period a year ago.

"These results reinforce Northrop Grumman's record of solid sales and earnings growth and demonstrate our ability to consistently deliver strong financial performance," said Ronald D. Sugar, chairman, CEO and president. "Based on the strength of year-to-date results, we now expect 2004 sales to increase to around $29 billion, earnings per share from continuing operations to grow to between $2.90 and $3.00, and net cash provided by operations to be about $1.7 billion."

Net income for the 2004 second quarter was $295 million, or $0.81 per diluted share, compared with $205 million, or $0.54 per diluted share for the same period of 2003. Contract acquisitions were $5.3 billion in the second quarter of 2004 compared with $5.2 billion for the same period of 2003. Total funded backlog was $26.2 billion at June 30, 2004, compared with $26.9 billion at Dec. 31, 2003.

In the company’s Space Technology unit, second quarter 2004 sales rose 14 percent to $836 million from $733 million last year 2003 results, primarily due to higher sales in Software Defined Radios, Civil Space, and Intelligence, Surveillance & Reconnaissance. Civil Space revenue increased 28 percent because of higher volume in the National Polar-Orbiting Operational Environmental Satellite System and James Webb Space Telescope programs. Intelligence, Surveillance & Reconnaissance revenue also rose more than 18 percent. Second quarter 2004 operating margin rose 11 percent as compared with the second quarter 2003, primarily due to higher sales volume.

The company expects 2004 sales of approximately $29 billion versus previous guidance of approximately $28 billion. Net cash provided by operating activities is expected to be approximately $1.7 billion in 2004, versus the prior estimate of approximately $1.5 billion.

Northrop ranks third in revenue among defense companies, behind Lockheed Martin Corp. and Boeing Co.