SD UNION TRIBUNE– Northrop Grumman Corp. on Wednesday said its first-quarter profit rose almost 50 percent, boosted by higher sales of military products like aerial drones and a larger contract for a satellite-based tracking system.

The No. 2 defense contractor seems largely insulated from the recession, which has hurt earnings at other U.S. manufacturers like Boeing Co., Caterpillar Inc. and rival Lockheed Martin Corp. It appears Defense Secretary Robert Gates’ proposed fiscal 2010 defense budget, which begins Oct. 1, will not cancel or hurt any of Northrop’s ongoing projects for the military.

The Los Angeles-based company also raised its 2009 outlook, reflecting a pretax gain of up to $70 million in the second quarter from a legal settlement with the U.S. government.

Northrop Grumman said its full-year forecast is now $4.65 to $4.90, up from previous guidance of $4.50 to $4.75.

The results were a contrast to Lockheed Martin, which reported a 9-percent decline in first-quarter profit on Tuesday as a result of growing pension costs. The rival continues to devote more cash to a pension plan that has been hurt by sharp declines in the stock market. For its part, Northrop Grumman is considering kicking in up to $500 million to cover its pension costs in 2009, beyond its required contribution of $126 million for the year.

“Northrop Grumman is off to a solid start in 2009,” said CEO Ronald Sugar, on a call with Wall Street analysts.

In the latest quarter ended March 31, the company earned $389 million, or $1.17 per share, up from $264 million, or 76 cents per share, in the same period last year.

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