Northrop Grumman had $1.7 billion profit in 2009
Friday, February 5, 2010
Northrop Grumman posted a $1.7 billion profit in 2009, officials at the Los Angeles-based defense contractor said Thursday. It was a stark contrast to the $1.3 billion in losses the company incurred the previous year, when it had to account for the decline in value of companies it bought earlier in the decade.
The $5.21-per-share profit, company officials said, reflects the December sale of its Chantilly-based advisory services business TASC and the consolidation of some operations in its five units. But officials also attribute it to revenue generated from contracts to build spy satellites, fighter jets and electronic systems to protect planes from missiles.
Northrop is preparing to relocate to the Washington region next year. Sources say the company has begun reviewing sites in Northern Virginia.
Fortunes at the company are tied to steady increases in defense spending related to the wars in Afghanistan and Iraq. The defense budget grew to $693 billion in fiscal 2010 from $667 billion the previous year. The government is proposing $708 billion in the fiscal 2011 budget.
"It appears Northrop Grumman's portfolio is well aligned with the nation's security needs," Wes Bush, the company's chief executive and president, said in a conference call Thursday.
In 2008, Northrop incurred charges associated with its previous purchases of TRW and Litton Industries; last year, it earned $1.65 billion when it sold TASC, a business that advised the federal government on the type of intelligence systems and other technology it should acquire.
The sale was prompted by a law that attempts to avert conflicts of interest by prohibiting companies such as Northrop Grumman from advising the government to obtain services it could then provide.
The company reported a $413 million ($1.31) profit in the fourth quarter, compared with a net loss of $2.5 billion ($7.75) during the same period the previous year.
Meanwhile, two sources with knowledge of Northrop Grumman's site-selection process, who spoke on the condition of anonymity because they were not authorized to speak publicly, said company executives are looking at a June 2011 move-in date to an existing facility for about 150 employees. Four sites are being considered in Fairfax County and one in Arlington County, the sources said.
But Northrop Grumman spokesman Randy Belote said a selection had not been made, saying the company has yet to receive formal proposals from officials in the District, Maryland and Virginia.