Defense-aerospace parts manufacturingHeadquarters:
Kent KresaMarket Cap:
$8.1billion Dividend Yield: 1.69%Total Liabilities:
$12.1 billion P/E Ratio: 13.9Long-Term Debt:
For the past year and a half, Northrop Grumman Corp.'s stock has zigged while the rest of the market has zagged. At no time was this more evident than during the week of the markets' Sept. 17 reopening.
That the Century City-based defense and aerospace contractor opened at $99, $17.06 above its Sept. 10 close, should have come as no surprise. Even as the overall market plunged, investors moved toward defense-related stalwarts like Lockheed Martin Corp., Raytheon Co. and Northrop, whose stocks closed up 15 percent, 27 percent and 16 percent on the day, respectively.
Shares received another boost on Sept. 20, with the announcement that Ronald D. Sugar, current president at Northrop's Litton unit and former president of TRW Corp., had been named president and chief operating officer of the parent company. Investors applauded the move, driving the stock up $4.91 on a day the Dow Jones lost 382.92.
Sugar said his ascension is "a culmination of (chief executive) Kent Kresa's repositioning the company from being a company that makes airplanes to providing a full range of technology."
Northrop had been bucking the Dow's downward trend for a full 15 months before the terrorist attack. From March 2, 2000 to Sept. 10, 2001, shares nearly doubled, from $42.32 to $81.94. During the same period, the Dow fell 6 percent.Unmanned vehicles
Sam Pearlstein, an analyst with First Union Securities in New York, attributes Northrop's gain to a combination of its aggressive growth strategy highlighted by the $5.2 billion purchase of Litton this spring and its position in the unmanned aircraft market.
"These sets of technology are exactly what's needed to hunt down terrorists," said Sugar. "The kind of systems we thought would be necessary are exactly the kind (that) should be deployed. The ability to apply smart weapons electronic warfare to jam and confuse enemy those are the kind of systems we have."
This is reflected by Northrop's Global Hawk, an unmanned aircraft that has set altitude and endurance records since testing began this spring. Northrop was awarded an $84 million contract last February for the development of the aircraft, 60 of which are expected to be purchased by the Air Force.
The Litton merger, initially met with investor skepticism, also has contributed to the stock climb. Investors expect Northrop to benefit from Litton's expertise in defense electronics and military shipbuilding.
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