Northrop Grumman Profit Up 8 Percent

By Reuters -  |  Posted 2008-07-29

NEW YORK (Reuters) - Northrop Grumman Corp (NOC.N: Quote, Profile, Research, Stock Buzz) said on Tuesday quarterly profit rose 8 percent, as higher sales of its military equipment were helped by a one-time gain from the sale of a business.

The U.S. No. 3 defense contractor behind Lockheed Martin Corp (LMT.N: Quote, Profile, Research, Stock Buzz) and Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) narrowly beat analysts' average estimate, and said it was on track to hit its full-year profit forecast.

The company, which makes bombers, warships and a range of military electronics, reported second-quarter net profit of $495 million, or $1.44 per share, compared with $460 million, or $1.31 per share, in the year-ago quarter.

Profit included a $58 million gain from the sale of its electro-optical systems business and $16 million of tax benefits after a settlement with U.S. federal tax authorities relating to tax payments for the years 2001 through 2003.

Excluding one-time items and discontinued operations, Northrop's earnings were $1.40 per share, while Wall Street was expecting $1.39, according to Reuters Estimates.

Sales rose 10 percent to $8.6 billion, above analysts' average forecast of $8.3 billion, helped by increases in each of its four main units: aerospace, electronics, shipbuilding, and information and services.

Northrop said it was on track to hit its full-year earnings forecast of $4.90 to $5.15 per share. Wall Street is expecting $5.12, on average.

The company said it continues to carry the $1.5 billion refueling tanker contract award it won from the U.S. Air Force in February in its backlog of work to be performed.

The contract, a prelude to a $35 billion program to replace the United States' mid-air refueling fleet, was protested by losing bidder Boeing, and is now set to be reopened by the Defense Department. Northrop is teamed with European aerospace company EADS (EAD.PA: Quote, Profile, Research, Stock Buzz) in its bid to retain the contract.

(Reporting by Bill Rigby, editing by Dave Zimmerman)