Northrop Grumman 3Q Profits Soar

Northrop Grumman Corp. (NOC) said third-quarter profit soared 62%, helped by a gain from the dissolution of a joint venture and a strong performance in its ships business. It also raised its forecast for 2007 earnings from continuing operations. The Los Angeles global defense and technology company said net income rose to $489m, or $1.41 a share, from $302m, or 86 cents a share, a year earlier. The latest results included a gain of $21m, or 6 cents a share, for the dissolution of the company's AMSEC joint venture with SAIC Inc. (SAI). For giving up its 55% stake in AMSEC, SAIC received some of the venture's operations. Year-ago results included a pretax legal provision of $112.5m, or 20 cents a share. Revenue rose 6.7% to $7.93b from $7.43b a year ago. Analysts, on average, were expecting earnings, excluding items, of $1.27 a share and revenue of $7.92 billion. Shares closed Tuesday at $79.53 and recently traded at $78.90 in premarket activity. The company's funded backlog at the end of the quarter was $7.48b, compared with $6.18b a year ago. Sales at Northrop's information and services business rose 8.7% to $3.14b. Aerospace revenue slipped 0.5% to $2b due to lower volume in Integrated Systems, partly offset by higher volume in Space Technology. Ships revenue rose 19% to $1.47b, helped by the gain from the AMSEC reorganization. Electronics sales edged up 0.5% to $1.67b. The company said it expects 2007 earnings from continuing operations of $5.10 a share, up from a previous estimate of $4.90 to $5.05 a share. Wall Street analysts were expecting 2007 earnings, excluding items, of $5.05 a share. [Source: Dow Jones]