Ronald D. Sugar
Chairman and Chief Executive Officer,
Northrop Grumman Corporation
On Thursday, January 24, 2008, Northrop Grumman Chairman and CEO Ronald D. Sugar appeared on CNBC’s “Street Signs” to discuss the company’s 2007 fourth quarter and year-end financial results. Below is a transcript of the interview.
Erin Burnett, anchor: And now let's go to Northrop Grumman. The defense company coming out with earnings today. They were good. They were up a little bit from a year ago, $1.31 a share. That's better than what analysts were looking for. The defense industry remains strong.
And you can see shares of Northrop – a little change today. They are down about 33 cents.
We are joined now first, though, on CNBC with the CEO and Chairman of Northrop Grumman, Ronald Sugar. Dr. Sugar, pleasure to be with you and speak with you again.
Ronald Sugar: Thank you, Erin. Glad to be here.
Burnett: I'm curious, just looking through here, it appears 2007 in many ways was a significant year for you, because your aeronautics division became your most profitable. What led that?
Sugar: Well, we had outstanding performance in 2007 across the board, Erin. All of our businesses actually improved in terms of their performance. We achieved record sales, earnings, earnings per share and cash. And we're extremely pleased with the trend in '07.
Burnett: So what was -- I know it's in a sense strange to use the word “product” for you, but what was your best seller?
Sugar: We have a bunch. You know we have about 20,000 or 30,000 different programs under way. But certainly our shipbuilding business made a significant improvement over last year.
As you recall, we have had the impacts of the Hurricane Katrina devastation for a couple of years. We're rebuilding those shipyards. Since that storm, we've delivered six warships to the United States Navy. Our aircraft business is doing well, our information technology business and our electronics, so I'm very pleased. It's been a very balanced performance across the board.
Burnett: Who do you sell to overseas?
Sugar: We participate with a number of governments, friends of the United States. Obviously our closest ally is the United Kingdom, the Australians, and others in Europe and Middle East. Our purpose is to obviously provide national security products in conjunction with the United States' policies overseas.
Burnett: How important is the election for you this year? And I don't expect you to come out and say who you want to win. I know you're not going to do that. But how important might it be if we were to have someone come into the White House who said, look, we're going to wholesale get out of Iraq, we're going to make big shifts in terms of troop deployment?
Sugar: Well, first of all, the election process is important in a lot of ways. However, I would tell you that our business and the work that our people do is driven more by the threats that we perceive around the world than they are about who's in power.
The Congress basically appropriates the money. We've had for the last couple years a Democratic Congress, which has provided very strong support to national defense and national security.
Northrop Grumman is a company that's not really heavily exposed to the supplementals to support the Iraq war. So, irrespective of the pace of pullout, I don't think you'll see much change in our fortunes.
We're really involved in the advanced technology to make the country strong over the next five to ten years. And that's something which I think both parties of Congress very strongly support.
Burnett: All right. Dr. Sugar, thank you very much. Appreciate your clarifying Iraq. I know you've talked about it with us before, but I think sometimes people forget who does what in your industry. Appreciate your being with us.
