Dried-Up Government Funds Hurt Northrop Grumman in Q2

Northrop Grumman’s headquarters. Photo: Northrop Grumman

[Via Satellite 07-25-2014] Northrop Grumman reported lower sales in three of the company’s four main sectors during second quarter 2014. aerospace systems experienced a 4 percent decrease, electronic systems a 2 percent decrease, and information systems an 8 percent decrease. Technical services increased during Q2 by 1 percent.

Northrop Grumman attributed the lower sales in aerospace systems to reduced Unmanned Aerial Vehicle (UAV) sales and volume declines for space programs, such as the Advanced Extremely High Frequency (AEHF) satellite program. Electronic systems saw fewer navigation, maritime systems and infrared countermeasure product sales, but was buoyed by international programs and higher volume for space programs. The company recently broke ground on the new Maryland Space Assembly and Test, or M-SAT facility for satellites to increase the company’s payload integration capabilities.

Lessened government funding resulted in the lower sales for information systems as well. Technical services’ increase in sales was attributed mainly to the acquisition of Qantas Defence Services and stronger international sales.

Northrop Grumman totaled $511 million in net earnings during Q2. As of June 30, 2014, the company’s backlog stood at $35.6 billion.