Northrop Grumman Corp. shares dipped Thursday despite strong fourth quarter earnings.

Northrop Grumman reported fourth quarter net income of $453 million ($1.28 per share) a 35.6 percent increase from $334 million (92 cents) for the same period a year earlier, beating analysts’ estimates of $1.26 per share, according to Thompson Financial.

Revenues for the Los Angeles-based defense contractor were up 4.6 percent to $8.02 billion, with the company crediting strong sales across the board as well as expanding business in the non-defense sector.

Northrop said it expects 2007 earnings guidance of $4.80 to $5.05, exceeding analysts estimates of $4.85.

Chief Executive Ronald Sugar also said the company has not decided if it will drop its bid to produce the Air Force tanker. Earlier this month, Northrop threatened to drop its bid contending the bidding process inherently favors competitor Boeing Co.

Despite beating analysts’ estimates, shares in Northrop were down 68 cents to $71.12 in midday trading Thursday.