Northrop Grumman has mixed fourth quarter
Sales in the company's information systems sector decreased while operating income rose compared to 2009
EDITOR'S NOTE: This story has been updated to correct the spelling of Northrop Grumman.
Northrop Grumman Corp. reported on lower sales in its information systems sector during the fourth quarter of 2010, while the company's operating income increased 66 percent.
Information systems’ fourth quarter sales declined 4 percent. They fell from $2.174 billion in 2009’s fourth quarter to $2.085 billion. Volume for intelligence and defense programs decreased, although the reduction was offset by higher sales in civilian systems programs, the company reported.
For the full year, information systems declined by 2 percent. Its sales fell by $141 million from 2009, as sales slipped from $8.536 billion in 2009 to $8.395 billion.
The company had fewer sales for work in intelligence and civilian systems programs. But it had more sales in defense programs, which helped limit the percentage decline from 2009, according to the financial report. Northrop Grumman also chalked up the decreases to fewer workdays in 2010 than the previous year.
Despite the sales results, fourth quarter income increased by 66 percent. Northrop Grumman had $178 million in income for the fourth quarter of 2010 and just $107 million in 2009. For the full year, it increased 21.2 percent, going from $624 million to $756 million, according to the report.
Northrop Grumman said the results from the fourth quarter and the year reflect improved program performance for civil systems programs, as well as the fewer expenses compared to the fourth quarter of 2009 related to TASC Inc., an advisory services branch of the company, which was sold in late 2009.
The overall fourth quarter 2010 earnings from continuing operations totaled $376 million compared with $375 million in 2009. Sales in the fourth quarter of 2010 totaled $8.6 billion, down from $8.9 billion in 2009. Cash provided by operations in the fourth quarter increased to $1.4 billion from $931 million in 2009.
Northrop Grumman executives were pleased with the strong finish in 2010.
“Operating income and cash generation exceeded our guidance for the year, demonstrating that across all our businesses, our employees are focusing on performance and building a track record of consistent execution,” said Wes Bush, Northrop Grumman’s president and CEO.
Matthew Weigelt is a former FCW senior writer who covered acquisition and procurement.