Northrop exits one business, launches another
- By John Moore
- Jan 26, 2006
Northrop Grumman will drop its reseller operation but has added a new business segment to focus on logistics support.
Company officials discussed the moves earlier this week during the company’s fourth-quarter earnings conference call. Northrop Grumman reported December quarter net income of $331 million, a 22 percent increase compared with $272 million last year. The company’s diluted earnings per share of $0.92 compares with $0.74 for the year-earlier quarter. Revenue increased slightly to $7.9 billion from $7.8 billion last year.
Northrop Grumman’s Information Technology segment saw a fourth-quarter sales increase of 4 percent. The company said higher sales in areas such as government IT were partially offset by lower sales in the company’s reseller operation, Enterprise IT.
The company now plans to exit the reseller business, hotly contested in the federal space by companies such as CDW Government and GTSI. Ronald Sugar, Northrop Grumman’s chairman, chief executive officer and president, said the reseller group is “no longer a strategic fit for our company.” Company officials didn’t say whether they would close or sell the reseller business.
Northrop Grumman, meanwhile, has launched a new business sector, dubbed Technical Services. The new effort will focus on logistics support and sustainment, Sugar said. James Cameron will lead the unit. He was formerly sector vice president and general manager of Northrop Grumman’s Defense and Navigation Systems divisions.
Sugar said Technical Services will serve as a base for future growth, adding that the sector will initially draw from programs within the Electronic Systems, Integrated Systems, Mission Systems and IT segments.