Northrop Grumman Corp., Los Angeles, blamed a $51 million decline in pension income for the companys nearly 35% drop in net income from continuing operations for the second quarter. Pension income was $91 million for the quarter, down from $140 million in the same quarter a year earlier; spokesman Frank Moore attributed the decrease to the poor performance of the stock market.
Because of the decline, the companys net income from continuing operations fell to $114 million in the quarter, from $175 million a year earlier. "The comparable decline reflects a substantial decrease in pension income, according to a news release from the company.
The results for the quarter include the operations and pension income of Litton Industries Inc., which Northrop Grumman acquired in April. Northrop Grumman expects pension income for 2001 to be about $340 million, down from $538 million it reported in 2000, before the Litton acquisition. In the year ended July 31, 2000, Litton reported $85.8 million in pension income.
Northrop Grumman had $11.7 billion in defined benefit assets as of Dec. 31. Littons defined benefit assets totaled $2.9 billion as of July 31, 2000. Northrop Grummans asset allocation included 75% in equities, and Littons, 88%, according to the Money Market Directory.