Northrop Grumman's earnings fall 71%

February 07, 1997|By Greg Schneider | Greg Schneider,SUN STAFF

Northrop Grumman Corp. reported a 71 percent drop in earnings in the fourth quarter of 1996 after taking a $90 million charge from closing several plants.

The California-based company logged net income of $17 million, or 30 cents a share, for the quarter. That's down from net income of $58 million, or $1.17 a share, in the same period in 1995.

Without one-time adjustments, Northrop Grumman reported that operating profit for the quarter increased 31 percent to $213 million, from $162 million for that period the year before.

The company said the $90 million charge reduced net income by $1 per share. That was partially offset by a pretax gain of $10 million, equivalent to 12 cents per share, from the sale of Northrop Grumman's remaining stake in ETEC Systems.

Officials said the one-time charge caused the company's year-end income to drop 7 percent from the year before, to $234 million or $4.33 a share. Net income for 1995 was $252 million, or $5.11 a share.

Despite the income drop, Northrop Grumman posted record sales and profit margins for 1996, thanks in large part to the March acquisition of the Westinghouse Electric Corp. radar plant in Linthicum.

Performance at the plant, now known as the Electronic Sensors and Systems Division of Northrop Grumman, more than offset decreases in other electronics programs, the company said.

Fourth-quarter electronics sales rose 67 percent, compared with the year-earlier period -- to more than $1.2 billion from $722 million.

For the year, electronics sales topped $4 billion, up 74 percent from the $2.3 billion posted in 1995.

Northrop Grumman's overall sales reached $2.2 billion for the fourth quarter, up from $1.8 billion in the same quarter in 1995.

The company logged almost $8.1 billion in sales for the year, an all-time high that was up 18 percent over the $6.8 billion posted in 1995.

That total is on track with the company's goal of reaching $10 billion in sales by 2000, Kent Kresa, Northrop Grumman president, chairman and chief executive officer said in a news release.

The company's yearly operating margin also reached a record high, hitting $658 million -- a 23 percent increase over the $536 million margin registered the year before. "The record operating margin achieved in 1996 reflects the success we've had in integrating businesses acquired over the past several years," Kresa said. "The synergy we've achieved, coupled with our focus on streamlining operations and an adherence to shareholder value objectives, are expected to lead to even better operational results in the years ahead."

Pub Date: 2/07/97

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