Northrop Grumman: Katrina recovery will soon be complete

New Orleans CityBusiness, Apr 25, 2006 by CityBusiness Staff Report

Hurricane Katrina clipped 25 percent from the shipbuilding sales at Los Angeles-based Northrop Grumman Corp. but the company maintained its forecast for double-digit profit growth in 2006.Shipbuilding sales were still a healthy $1.13 billion despite delays from Hurricane Katrina and lower project volumes.Its Gulf Coast facilities are nearing pre-Hurricane Katrina production levels eight months after the storm.

First-quarter staffing levels inat Avondale and Pascagoula, Miss., are 85 percent of pre-Katrina levels.The company reduced its expected hurricane-related property damage estimate to $850 million from $1 billion. It expects to fully recover from the storm by year's end.The defense contractor reported a lower first-quarter profit as revenue declined and gains from a stock sale boosted last year's results for the world's largest shipbuilder.Earnings dipped to $358 million, $1.02 per share, from $409 million, $1.11 per share, the year before when the company gained $56 million from selling its Teldix aircraft parts unit and the stock in TRW Automotive Holdings Corp.Excluding last year's gains, earnings from continuing operations were $357 million, $1.02 per share, versus $398 million, or $1.08 per share, last year. Analysts surveyed by Thomson Financial were looking for a profit of 99 cents per share in the latest quarter.Overall we had another very solid quarter and we are on track to achieve our fourth consecutive year now of double-digit earnings growth, CEO Ron Sugar said during a conference call with analysts.Revenue during the quarter fell 4 percent to $7.18 billion compared with $7.8 billion in the same period last year.Management pegged record contract acquisitions during the quarter at $12.3 billion.We have the opportunity to build on this foundation with upcoming competitive opportunities totaling tens of billions of dollars, Sugar said.Among its upcoming slate of contract bids is a proposal to build the NASA's Crew Exploration Vehicle, Sugar said.Northrop Grumman shares fell $1.87 to $69.36 in afternoon trading on the New York Stock Exchange.