Pension Costs Drag on Northrop Grumman
Defense contractor Northrop Grumman (NOC) reported fourth-quarter earnings that were flat with year-ago levels, as pension costs offset revenue gains.
The company earned $224 million, or $1.22 a share, compared with $224 million, or $1.72 a share, in the year-ago period. Analysts were expecting $1.10 a share, according to Thomson First Call.
Fourth-quarter net income includes a $22 million gain, or 12 cents a share, on the sale of discontinued operations. Excluding that gain, results were in line with expectations.
Sales for the quarter increased 47% to $7.1 billion from $4.8 billion in the same period last year. Pension expenses totaled $145 million in the quarter, vs. pension income of $22 million a year earlier.For the year, sales increased 52% to $26.3 billion, from $17.2 billion in 2002, because of double-digit sales growth in electronic systems, ships, information technology and integrated systems, combined with the contributions of the space technology and mission systems segments acquired in December 2002. Income from continuing operations in the fourth quarter, before the effect of an accounting change, was $203 million, or $1.11 a share, compared with $226 million, or $1.73 a share, in the year-ago period. For the year, income from continuing operations was $808 million, or $4.32 a share. Looking ahead, the company expects sales of $28 billion in 2004, a 6.5% gain over year-ago results. Earnings per share from continuing operations are expected to be between $5.60 and $5.90 a share, including pension expense of $330 million. Cash flow from operations is forecast at $1.5 billion. In recent trading, shares of Northrop Grumman were up 81 cents, or 0.83%, to $98.81.
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