Northrop Grumman Corp., the world’s largest builder of warships, said fourth-quarter earnings and revenue rose on strong U.S. military spending and lower pension costs.

For the fourth quarter ended Dec. 31, Northrop reported net income of $294 million (80 cents per diluted share), versus $224 million (61 cents per share) for the year-ago period. Sales rose 9.7 percent to $7.9 billion from $7.1 billion for the fourth quarter of 2003.

Income from continuing operations rose 62 percent to $296 million (81 cents per diluted share) from $183 million (50 cents per share) for the like period a year earlier. The company said fourth quarter 2004 and fourth quarter 2003 operating results reflected the reclassification of certain operations from discontinued to continuing operations.

Northrop said that fourth quarter 2004 pension expenses declined to $86 million from $145 million for the year-ago period. Pension expense allocated to contracts increased operating margin by $91 million in the fourth quarter of 2004 and $64 million for the same period of 2003.

The Los Angeles-based company also said that it expects 2005 sales to range between $31 billion and $31.5 billion. Earnings per share from continuing operations are expected to range between $3.45 and $3.60. Net cash provided by operating activities is expected to be between $2.2 billion and $2.5 billion in 2005.

Northrop’s stock was up 1.7 percent to $52.86 in late-morning trading.

Northrop competitor Boeing Co., with significant local operations, also reported results on Wednesday. Fourth-quarter profits plunged 84 percent, weighed down by charges for shuttering production of its Long Beach-built 717 jet and losing out on an aerial tanker contract with the Pentagon.

For the fourth quarter ended Dec. 31, Chicago-based Boeing reported earnings of 184 million (80 cents per diluted share), compared with $1.1 billion ($1.40 per share) for the like year-earlier quarter. Revenues increased 1 percent to $13.3 billion from $13.2 billion.

Boeing said its 2005 revenue outlook is approximately $58 billion and earnings-per-share guidance for this year is between $2.40 and $2.60 per share. The commercial airplanes delivery forecast for 2005 is unchanged at nearly 320 airplanes.

Boeing’s stock rose 3.1 percent to $52.61 in late-morning trade.