Northrop Grumman

(NOC) - Get Report

reported a loss for the fourth quarter as it wrote down the value of two acquisitions.

The defense contractor had a loss of $2.54 billion, or $7.76 per share, compared with a profit of $457 million, or $1.32 per share, in the same period a year earlier.

A $3.06 billion charge for goodwill impairment was the result of marking to market the value of Northrop's acquisitions of Litton Industries and TRW.

Not counting the charge, Northrop earned $524 million, or $1.57 per share. Analysts at Thomson Reuters were expecting $1.55 per share.

Fourth-quarter revenue rose 4% to $9.15 billion, led by stronger sales in electronics.

Our underlying fourth-quarter operating results were outstanding and represent a strong finish to the year," said Ronald D. Sugar, Northrop Grumman chairman and chief executive officer. "We begin 2009 with a $78 billion dollar backlog, the highest in Northrop Grumman's history, and a tribute to the dedication and talent of our 120,000 employees.

"Looking ahead, we continue to position our organization to be more agile and competitive," he said. "Our priorities are flawless execution for our customers and superior returns for our shareholders through the generation of outstanding cash flow and solid growth in pension-adjusted earnings."

Speaking of pensions, the company's release said: "Due to adverse capital market conditions, the company's pension plan assets experienced a negative return of approximately 16% in 2008 compared with a long-term estimated rate of return of 8.5%. As a result of plan returns, the company estimates that its 2009 net pension adjustment will be a pre-tax expense of approximately $335 million (approximately 65 cents on a per share diluted basis), compared with income of $263 million for 2008 net pension adjustment. The 2009 estimate is based on a 6.25% discount rate and a long-term rate of return of 8.5%."

Shipbuilding sales fell 3% due to lower volume of the Navy's LPD program, a class of amphibious transport dock ships, and the Coast Guard's National Security Cutter program. The business, which also builds aircraft carriers and nuclear powered submarines, was also hurt by its $2.49 billion share of the $3.06 billion charge.

For 2009, Northrop forecast EPS from $4.50 to $4.75 on revenue of $34.5 billion. Analysts, on average, are looking for profit of $5.10 per share on revenue of $35.19 billion.

Shares climbed 84 cents, or $1.74, or $3.73, to $48.35 in recent trading.

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