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Northrop Says 3rd-Quarter Earnings Beat Estimates

October 19, 2000|From Bloomberg News and Reuters

Defense contractor Northrop Grumman Corp. said Wednesday that its third-quarter earnings rose 29% due to the sale of stock, higher interest income and reduced interest payments on its debt.

Without those items, pretax earnings were flat from a year earlier, as Los Angeles-based Northrop has ceased production on its B-2 bomber program, reducing sales and earnings.

Northrop shares fell $4 to close at $83 on the New York Stock Exchange, amid a broad market decline. The stock has risen more than 50% this year.

Northrop, which makes aircraft, combat radar systems and electronic systems and does information technology contracting, said it earned $150 million, or $2.11 per share, from continuing operations in the third quarter, compared with $116 million, or $1.66, a year earlier.

Analysts on average had forecast earnings of $2.01 a share, according to research firm First Call/Thomson Financial.

The bulk of Northrop's earnings increase came from $18 million in interest income and $16 million from the sale of shares in SatCon Technology Corp., which makes electricity-producing fuel cells. Northrop acquired the shares when SatCon bought Northrop's power electronics business unit in late 1999.

Net income, including the results of discontinued operations and a charge for discontinued operations, was $132 million, or $1.86 a share, compared with $128 million, or $1.83 a share, a year earlier.

Total sales fell 4%, to $1.73 billion from $1.81 billion a year earlier.

Based on reduced pension income partially offset by improved operating earnings, Northrop said it is comfortable with the range of analysts' estimates for its 2000 earnings: $8.70 to $8.80 a share.


Oil and natural gas producer Occidental Petroleum Corp. said third-quarter earnings nearly tripled with higher energy prices.

Profit from operations rose to $370 million, or $1 a share, from $125 million, or 35 cents, a year earlier. Sales rose 80% to $3.81 billion from $2.11 billion, the company said.

Los Angeles-based Occidental was expected to earn $1.01 a share.

Occidental earned $690 million finding, producing and selling oil and gas in the quarter, up from $279 million. Oil on the New York Mercantile Exchange averaged $31.58 a barrel, up 45% from the average $21.71 in the 1999 third quarter. Gas prices are at record highs.

Occidental's debt was $7.06 billion at the end of the quarter, down from $9 billion in April. The company had said it planned to cut debt to $7 billion by the end of the year.

Occidental shares fell 13 cents to close at $20.25 on the NYSE.

At a Glance

Other Southern California company earnings, excluding one-time gains and charges unless noted:

* Los Angeles-based Cathay Bancorp Inc., the holding company of Cathay Bank, reported third-quarter net income of $11.5 million, or $1.26 per share, compared with $7.9 million, or 87 cents, a year ago. Net interest income rose 21% to $23.9 million.

* MiniMed Inc., a Sylmar-based maker of a blood sugar monitoring system, said its third-quarter profit rose 64% but fell short of analysts' expectations despite strong sales of its diabetic medical devices. The shortfall prompted its stock to lose $12.81 to close at $65.75 on Nasdaq. MiniMed's net income rose to $9.5 million, or 14 cents per share, from $5.8 million, or 9 cents, a year ago. Revenue grew 40% to $72.1 million. Analysts, on average, forecast earnings of 15 cents.

The company also said it concurred with analysts' expectations for its fourth-quarter results. Estimates for revenue range from $88 million to $98 million, while estimates for earnings per share range from 18 cents to 22 cents, MiniMed said.

* Citing strong orders and continued share gains in the global market for aluminum road wheels, Van Nuys-based Superior Industries International Inc. reported a 19% increase in third-quarter net income of $17.2 million, or 66 cents per share. That compares with net income of $14.5 million, or 54 cents, a year ago. Revenue rose 10% to $144.8 million.

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