IT Fuels Solid Quarter For Northrop GrummanIT Fuels Solid Quarter For Northrop Grumman

As governments continue to outsource IT, companies like Northrop Grumman--one of the nation's biggest IT integrators--benefit.

The defense maker and government contractor saw revenue for IT services for the fourth quarter of 2003 increase 11% to nearly $1.31 billion; for the year, IT services revenue grew 12% to $4.75 billion. Operating margins rose 16% for the quarter and 12% for the year.

The company says higher quarterly and annual sales and operating margins reflect strong growth in its government IT business. Northrop suggested the margins could have been higher if it weren't for $32 million in one-time charges posted the final quarter of 2002.

Overall, Northrop posted a profit of $224 million for the quarter, unchanged from a year earlier. However, earnings per share dropped to $1.22 from $1.72. Net income for 2003 reached $866 million, or $4.32 a share, compared with $64 million, or $5.72 a share, a year earlier. Fourth-quarter revenue soared to $7.1 billion, a 48% jump. For all of 2003, revenue leapt 52% to $26.2 billion, mostly because of double-digit sales growth in IT, integrated systems, electronic systems, and ships.