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Northrop Grumman Net Rises

Sales guidance for 2006 is a little soft.
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Earnings rose 21% from a year ago in

Northrop Grumman's

(NOC) - Get Northrop Grumman Corporation Report

fourth quarter, boosted by a higher operating margin and a lower tax rate.

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Northrop earned $331 million, or 92 cents a share, in the quarter, compared with $273 million, or 74 cents a share, a year ago. Sales were $7.86 billion in the most recent quarter compared with $7.85 billion a year ago. Analysts expected earnings of 83 cents a share on sales of $7.85 billion, according to Thomson First Call.

"Fourth-quarter 2005 income from continuing operations includes higher total segment operating margin, a lower effective tax rate, and a $14 million pretax gain on the sale of 1.3 million shares of Endwave common stock, partially offset by a $65 million pretax charge for the company's F-16 Block 60 program," Northrop said.

The company pegged 2006 earnings at $4.25 to $4.40 a share on sales of $31 billion. Analysts are forecasting $4.25 a share on sales of $32.22 billion.

"Our continued focus on performance drove higher sales, earnings and cash," Northrop said. "Solid overall operating performance, monetization of non-core assets, and our action to reduce share count contributed to this year's excellent results."

The stock closed at $60.76 Monday, about 13.8 times the high end of its 2006 guidance.