Northrop Grumman reveals name for possible spinoff

Huntington Ingalls Industries Inc. - that's the moniker Northrop Grumman Corp. gives the possible spinoff of its shipbuilding business in a preliminary filing Wednesday with the Securities and Exchange Commission.

The name is a nod to the founders of Northrop Grumman Shipbuilding-Newport News - Collis P. Huntington, who established the yard in 1886 - and of its Pascagoula, Miss., operations - Robert I. Ingalls Sr., who started Ingalls Iron Works in Birmingham, Ala., in 1938.

The SEC filing outlines the new company's business and how a spinoff would work. Northrop Grumman shareholders would receive publicly traded shares of Huntington Ingalls as the business is divorced from the Los Angeles-based defense contractor.

A spinoff still isn't a done deal, said Randy Belote, a Northrop Grumman spokesman.

The company announced in July that it was considering "strategic alternatives" for its shipbuilding business, which has become a source of difficulty because of quality problems on some submarines and amphibious ships. Other possibilities include a sale, but Bloomberg News reported that Northrop Grumman wasn't satisfied with an initial round of offers and was leaning toward spinoff.

Belote pointed out that Northrop said it would take several quarters to reach a decision, and "that remains the case."

According to the SEC filing, the shipbuilding business earned $124 million on $6.29 billion in revenue in 2009. That's a big improvement over 2008, when the business lost $2.42 billion after Northrop Grumman wrote off $2.49 billion of goodwill related to its 2001 acquisitions of Newport News Shipbuilding and the shipbuilding business of Litton Industries Inc.

The filing identified retired Navy Adm. Thomas B. Fargo was identified as the chairman of Huntington Ingalls and Mike Petters as its president and CEO.

Christopher Dinsmore, (757) 446-2271, chris.dinsmore@pilotonline.com