Defense giant Northrop cuts outlook, citing hurricanes
Monday, October 10th 2005, 10:08 am
By: News On 6
NEW YORK (Dow Jones/AP) _ Northrop Grumman Corp. cut its 2005 profit forecast Monday after estimating that damages and work delays caused by two recent hurricanes will lop up to 40 cents a share from full-year earnings.
The Los Angeles-based military contractor estimated damage to its shipbuilding unit caused by hurricanes Katrina and Rita at $1 billion and said it expects to take a charge of 8 cents a share in the third quarter to cover work delays.
Northrop said it expects to book another charge of 30 cents to 35 cents a share to cover increased costs associated with existing ship contracts caused by the work delays and tighter margins.
Northrop's Ship Systems shipyards on the Gulf Coast were hit by the hurricanes. The company said production work has resumed on the 11 ships under construction at its operations in New Orleans, Pascagoula, Miss., and Gulfport, Miss.
About 12,500 of its 19,800 employees are back to work at these shipyards, it said.