Northrop Grumman projects stable year for shipbuilding business

Northrop Grumman Corp., whose Newport News shipyard is Virginia's largest industrial employer, projects a stable year ahead for its shipbuilding business and expects to continue hiring workers.

"Shipbuilding is moving in the right direction," said Ron Sugar, chairman and chief executive of the Los Angeles-based defense conglomerate.

Sugar was upbeat about shipbuilding during a conference call Thursday with analysts about the company's fourth-quarter and 2007 results.

Last week, the company, the No. 3 U.S. defense contractor by revenue, announced it would realign its Newport News yard and two Gulf Coast shipyards under single management, effective Monday.

The merger will allow the company "to more agilely operate" its shipbuilding business and better manage the ebb and flow of work at each of its yards, Sugar said.

In last year's fourth quarter, the ships sector saw a 19 percent increase in sales over the same period in 2006, to $1.8 billion. For the year, sales rose 9 percent to $5.7 billion, while the sector's operating income jumped 37 percent to $538 million, the company said.

Fourth-quarter sales were boosted by Newport News' submarine programs, including the Navy's new Virginia-class subs, and contracts won by Amsec, a Newport News subsidiary that specializes in ship engineering and modernization.

The shipyard and Amsec employ about 21,000 in the region.

Jon W. Glass, (757) 446-2318, jon.glass@pilotonline.com