EARNINGS ROUNDUP / NORTHROP GRUMMAN
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Defense contractor Northrop Grumman Corp. warned Thursday that it would post losses for the 2008 fourth quarter and full year because of a charge of $3 billion to $3.4 billion connected to past acquisitions.
Recent market turmoil has forced Northrop to write down the value of its acquisitions of Litton Industries Inc. and TRW Inc. made in 2000 and 2001, respectively. Northrop annually accounts for the difference between book values and fair values of the company’s shipbuilding and space units at the end of November.
Including debt, Northrop paid $5.1 billion for Litton and $7.8 billion for TRW.
JSA Research analyst Paul Nisbet explained that the “paper loss” would not impair Northrop’s outlook or potential earnings going forward. The price on the books for Northrop’s shipbuilding and space operations “were too high given the decline in market values,” Nisbet said. “So, they have written it down to [reflect] the current market value.”
Century City-based Northrop forecasts 2008 earnings from continuing operations, before the charge, of about $5.20 a share -- in line with Wall Street’s average estimate.
Shares of Northrop Grumman rose 10 cents to $48.08.
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