Northrop Grumman's chief executive said today restricted work made up about a quarter of the company's sales in 2019.
Kathy Warden told analysts restricted work grew in all of the company's sectors and is a major growth driver for Northrop. Restricted work generally means classified work, but can also include some other special access programs.
During the call, Warden said Northrop sees hypersonics as another growth area. She told analysts the company has a "dual-path strategy," meaning it is serving as a subcontractor in propulsion to prime contractors but also pursing work as an integrator.
"We do see ourselves following both paths," Warden added. "We want to be a good provider to the primes in propulsion . . . but at the same time we do have the capability ourselves to be an integrator."
Meanwhile, the company reported sales in its most recent quarter of $8.7 billion, up 7% from the same three-month period a year earlier.
Northrop said it recorded a quarterly loss of $409 million. The company pointed to its use of a new accounting method for its pension and other post-retirement benefits, which it said resulted in a $1.4 billion after-tax expense.
The company is using the mark-to-market approach to pension accounting, which accounts for the funded status of pension plans in the fourth quarter of each year, rather than over the course of multiple years.
In 2019, Northrop recorded sales of $33.8 billion, up 12% from 2018. Northrop reported 2019 profit of $2.2 billion.