Northrop Drops 6.6% Amid Worries About Delays in Closing Key Sales

Northrop Grumman Corp. shares fell 6.6% on concerns that the fourth-largest U.S. aerospace company won’t complete several key sales as rapidly as investors had hoped.

The Los Angeles-based company’s shares fell $3.81 to close at $53.50 on the New York Stock Exchange. Earlier, the shares traded as low as $52.50.

A research note by Merrill Lynch & Co. analyst Byron Callan attributed the drop to concern about the timing of certain sales in Northrop’s electronics division, notably the United Arab Emirates’ $8-billion purchase of 80 F-16 fighters, for which Northrop makes the radar. The Pentagon is still deciding how much sophisticated combat gear to allow on the Lockheed Martin Corp.-made planes before it signs a contract with the UAE.

The delays involve $200 million in sales next year for Northrop, said Callan, who still has a “buy” rating on the company’s shares and left his earnings estimates unchanged.