LOS ANGELES -- Northrop Grumman Corp., the sixth-largest U.S. aerospace and defense company, said yesterday that its profit tumbled 85 percent in the fourth quarter as it took charges to account for expected cuts in production rates.
Net income fell to $17 million, or 24 cents a share, from $117 million, or $1.71, in the fourth quarter of 1997. The results included charges of $1.18 cents per share, disclosed last month, mostly covering cuts in Boeing Co.'s jetliner output. Northrop supplies parts to almost every Boeing jet.
Sales were unchanged at $2.5 billion.
The Los Angeles maker of the B-2 bomber has seen its stock drop almost 50 percent over the past year. A planned merger with Lockheed Martin Corp. was blocked by the Pentagon. Now it faces declining sales of commercial jetliners, slow growth in defense spending and delays in tests of some key programs.
Kent Kresa, Northrop's chairman, said annual sales will be "relatively flat" in 1999 and 2000, though he promised "double-digit" earnings growth after 2000. He said he's "comfortable" with analysts' forecasts for profit of $6 to $6.30 per share in 1999, and profit of $6.40 to $7.10 per share in 2000. Northrop earned $5.98 per share before charges in 1998.
Northrop's fourth-quarter charge totaled $125 million before taxes. The after-tax amount wasn't disclosed, and a spokesman couldn't provide it.
Pub Date: 2/04/99