Northrop Grumman's ( NOC) third-quarter earnings rose 5% from a year ago, reflecting costs incurred in the wake of Hurricane Katrina.

The technology contractor earned $293 million, or 81 cents a share, in the quarter, compared with earnings of $278 million, or 76 cents a share, a year ago. The latest quarter included a 30-cent hit to EPS from hurricane damage at its shipbuilding facilities along the Gulf Coast. It also had an asset-sale gain of 5 cents a share.

Sales were roughly unchanged at $7.4 billion. Analysts were expecting earnings of 69 cents a share on sales of $7.6 billion.

For the quarter, Northrop reported a higher operating margin in each of its business segments but ships, but it wasn't enough to keep the hurricane charge from lowering overall margin to $433 million from $538 million a year ago. Its tax rate was 33.8% in the latest period compared with 34.2% a year ago.

For 2005, the company expects to earn $3.60 to $3.70 a share on sales of $30.5 billion to $31 billion. Analysts expected earnings of $3.64 a share on sales of $30.95 billion. For 2006, it sees $4.10 to $4.30 a share on sales of $32 billion. Analysts were forecasting $4.22 a share on sales of $32.36 billion.

The stock closed at $53.90 Monday, about 13 times next year's Thomson First Call consensus estimate.

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