DWSS Cancellation Drives Northrop Revenue Lower

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Lower volume in classified space programs and the cancellation of the U.S. Air Force’s Defense Weather Satellite System contributed to an 8 percent sales decline at Northrop Grumman’s Aerospace Systems division during the first quarter of 2012, the company reported April 25.

Northrop Grumman Aerospace Systems of Redondo Beach, Calif., which also builds manned and unmanned aircraft, reported $2.38 billion in sales for the three months ending March 31, compared with $2.59 billion during the same period last year. Operating income was $279 million, down from $287 million during the 2011 first quarter.

Declines in space and manned aircraft sales more than offset higher volume for unmanned aircraft including the Global Hawk and Firebird, Northrop Grumman said.

Congress ordered the cancellation of the Defense Weather Satellite System last year, and the Air Force just recently closed the books on the program. Northrop Grumman Aerospace was prime contractor on the weather satellite system, which was hatched following the termination of a civil-military program that was plagued by cost growth and delays.

The 2012 first quarter also saw a 4.6 percent sales decline, to $1.72 billion, at Northrop Grumman’s Baltimore-based Electronic Systems sector, whose products include satellite sensors for applications such as missile warning. The company attributed the decline primarily to lower volume in unspecified intelligence, surveillance and reconnaissance, and targeting systems.

Northrop Grumman’s overall sales for the quarter were down roughly 9 percent, to $6.2 billion, compared with the same period last year.