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Northrop 3rd-Quarter Profit Rises 18% on Unit's Sales

October 15, 1998|From Bloomberg News

Northrop Grumman Corp. on Wednesday said that third-quarter earnings rose 18% on higher profit in its electronics and information technology unit.

The Los Angeles-based defense contractor said net income rose to $116 million, or $1.67 a share, from $98 million, or $1.44, in the year-earlier period. Revenue fell 3.7% to $2.21 billion from $2.3 billion.

The maker of the B-2 bomber, commercial aircraft fuselages and electronic systems benefited from higher sales and profit from its electronics and information technology units.

The quarter's results included pretax costs of $16 million, or 15 cents a share after tax, for realigning operating units, consolidating facilities and laboratories and getting out of certain businesses, the company said.

Northrop's electronics business operating profit more than doubled to $95 million from $46 million, and its sales rose 7.9% to $1.04 billion.

Information technology and services operating profit rose 9.1% to $24 million and sales rose 8.4% to $258 million.

Operating profit from its aircraft business fell 2.2% to $179 million, and the unit's sales fell 14% to $1.02 billion.

Northrop shares rose $1.25 to close at $72.25 on the New York Stock Exchange.

The company also said Wednesday that it had reached an agreement with the U.S. Air Force that will reduce the remanufacturing work required for

the Joint Surveillance and Targeting Radar System, or JSTARS program.

If there is any financial impact from the Joint STARS program, it's not expected to be known until the first half of next year, the company said.

Joint STARS is one of the most important aircraft systems in the U.S. military. Its radar can track moving armored and wheeled vehicles and helicopters and transmit terrain images in 3-D to ground and naval units.

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