LOS ANGELES , July 29 /PRNewswire-FirstCall/ -- Northrop Grumman
Corporation (NYSE: NOC) reported that second quarter 2008 earnings from
continuing operations increased to $483 million, or $1.40 per diluted share,
from $472 million, or $1.35 per diluted share, in the second quarter of 2007.
Earnings for the 2007 second quarter included tax benefits totaling $16
million, or $0.05 per share. Sales for the 2008 second quarter increased 10
percent to $8.6 billion from $7.9 billion in the 2007 second quarter. Cash
provided by operations for the 2008 second quarter totaled $607 million
compared with $741 million in the prior year period.
"Solid sales increases for all four businesses drove nearly double-digit
sales growth for the quarter. Operating income and margin rates for all four
businesses are in line with our expectations. Based on this quarter's solid
performance and our $67 billion total backlog, we are on track to achieve our
2008 guidance. The long-term outlook for Northrop Grumman continues to be
outstanding," said Ronald D. Sugar , Northrop Grumman chairman and chief
Operating income for the 2008 second quarter increased 6 percent to $806
million from $763 million in the 2007 second quarter. The increase in
operating income reflects higher sales volume, lower corporate unallocated
expenses, and improved net pension expense, offset by lower segment operating
income. Second quarter 2008 segment operating income declined by $14 million
principally due to lower operating income and margin rates for the
Shipbuilding and Information & Services businesses than in the prior year
Interest expense improved by $11 million compared with the prior year
period and other income improved by $14 million.
Federal and foreign income taxes for the 2008 second quarter increased to
$256 million from $199 million in the second quarter of 2007. The effective
tax rate applied to income from continuing operations for the 2008 second
quarter was 34.6 percent compared with 29.7 percent in the 2007 second
quarter. In the 2007 second quarter the company recognized tax benefits
totaling $16 million after reaching a favorable settlement with the Internal
Revenue Service regarding a portion of its audit for the years 2001 through
Net earnings for the 2008 second quarter increased 8 percent to $495
million, or $1.44 per diluted share, from $460 million, or $1.31 per diluted
share, for the same period of 2007. Second quarter 2008 net earnings include
a small after-tax gain on the sale of the company's Electro-Optical Systems
business. Earnings per share are based on weighted average diluted shares
outstanding of 344.1 million for the second quarter of 2008 and 355.3 million
for the second quarter of 2007. Weighted average shares outstanding for the
2007 second quarter include the dilutive effect of 6.4 million shares of the
company's mandatorily redeemable convertible preferred stock. These shares
were redeemed or converted to common shares on or before April 4, 2008 .
New business awards totaled $7.5 billion in the 2008 second quarter. Total
backlog, which includes funded backlog and firm orders for which funding is
not currently contractually obligated by the customer, was $66.9 billion as of
June 30, 2008 .
Cash provided by operations in the 2008 second quarter totaled $607
million compared with $741 million in the prior year period. Second quarter
2007 included a $125 million insurance recovery.
Cash and cash equivalents totaled $581 million at June 30, 2008 compared
with $963 million at Dec. 31, 2007 , and total debt was $3.9 billion at June
30, 2008 . Changes in cash and cash equivalents and total debt include the
following cash deployment, investing and financing actions during the first
six months of 2008:
This content continues onto the next page...