Ronald D. Sugar
Chairman and Chief Executive Officer,
Northrop Grumman Corporation
On Tuesday, April 24, 2007, Northrop Grumman Chairman and Chief Executive Officer Ronald Sugar appeared on the CNBC program "Power Lunch" to discuss the company’s 2007 first quarter financial results. Below is the transcript.
BECKY QUICK:
First on CNBC, we're very pleased to welcome the Chairman and CEO Ronald Sugar. And Mr. Sugar, thank you for being with us today.
RONALD SUGAR:
Thank you, Becky. Pleased to be here.
QUICK:
There are some people who would be a little surprised to see a defense company that actually misses The Street's expectations. What happened here?
SUGAR:
Well, we don't set the expectations; we set guidance for the whole year. We don't guide for the quarter. We reaffirmed our guidance for the year. We're not coming off that at all. We had, actually, an excellent operating quarter. We were up in sales, up in profits, up in earnings per share, very strongly up in cash, and bookings. So overall we're very pleased with the quarter; we don't set the consensus.
QUICK:
Sure. I guess some things that maybe caught The Street by surprise -- the strike, the charges related to the strike. That strike's over right now, right?
SUGAR:
It is over. We did have some impact on the strike down in our shipyards in Mississippi. That's behind us. The folks are there building great ships again.
QUICK:
What are you seeing for the rest of this year? If you're already setting the guidance and kind of sticking with what you've told The Street to be looking for, where do you see things going the rest of the year?
SUGAR:
We've had some very terrific initial wins this quarter in unmanned air vehicles. We won an interesting program you wouldn't think of Northrop as winning -- A large postal sorting system, nearly a billion dollars to sort the flats and packages. We've had a variety of other things – orders on ships, orders on radars. The company has probably 20,000 ongoing programs and we're not dependent on any one contract for our revenues.
QUICK:
You are the Pentagon's number-three supplier. Where do things stand right now with Democrats in control of Congress? Has that changed the scenario, in terms of getting funding from the Pentagon?
SUGAR:
You know, Becky, I think there remains a very strong bipartisan support for defense of the nation and the kind of programs that we're involved in, which are the longer-term programs -- the ones that involve the assets we're going to need over the next five, 10, 15 years to fight the war on terrorism and deal with any other threats. I think both parties support that. So we see that coming along pretty easily.
QUICK:
Where do things stand right now with the unmanned aircraft? How has that been coming along and are you receiving the support you expect from the Pentagon?
SUGAR:
Very much so. This has been a terrific Northrop story and a terrific story for the nation. We have the Global Hawk aircraft. We also have the Fire Scout.
Global Hawk is actively involved in supporting the activities in the Middle East on an ongoing basis. We have several aircraft deployed over there. We're in production for those aircraft now. We have proposals into the United States Navy for both a Navy version of that as well as an unmanned combat air system, a different kind of airplane that can operate off the deck of aircraft carriers. So a lot is going on in that arena. A very important force multiplier for the nation.
QUICK:
Mr. Sugar, I'd like to thank you for your time today. We appreciate it.
