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Litton Reports 16% Drop in Profit, Cites Guidance Systems Overruns

March 02, 2000|From Bloomberg News

Litton Industries Inc., the U.S. Navy's third-biggest shipbuilder, said Wednesday that fiscal second-quarter profit fell 16% because of cost overruns on contracts to develop guidance and control systems.

Net income for the quarter ended Jan. 31 dropped to $36.85 million, or 80 cents a share, from $43.98 million, or 94 cents, in the year-ago period. Sales rose 19% to $1.35 billion from $1.13 billion.

Litton shares have tumbled 18% since Feb. 7, when it issued a profit warning on the overruns. Profit was hurt from higher-than-expected development expenses on about $184 million in contracts for combat ships and helicopters from the U.S. and Royal Australian navies.

Sales from Litton's advanced electronics business, which includes guidance and control systems, fell 5.6% to $341 million. The unit had a loss of $14.5 million, contrasted with operating profit of $26.9 million in the year-earlier quarter.

Shipbuilding sales doubled to $484.7 million, boosted by the August acquisition of Avondale Industries Inc. Operating profit for the unit rose to $63.7 million from $34.1 million.

Shares of Litton fell 19 cents to close at $29.75 on the New York Stock Exchange. The stock has plunged about 46% in the last year.

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At a Glance

* Big Dog Holdings, a Santa Barbara-based apparel maker, reported record fourth-quarter net income for the period ended Dec. 31 of $3.7 million, or 31 cents per share, compared with $3.5 million, or 30 cents, a year ago. Sales rose to $39.1 million, up from $35.7 million. Same-store sales increased 4.1% for the fourth quarter.

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