Northrop Grumman Makes Gains

Northrop Grumman Corp is the third largest defense contractor in the United States and it made significant gains during the first quarter. The unexpected gains exceeded analyst’s predictions. The sale of drone aircraft are responsible for the increased numbers.

Northrop Grumman Corp., the third- largest U.S. defense contractor, reported first-quarter earnings that exceeded analysts’ estimates and raised its forecast for full-year profit, aided by rising sales of drone aircraft.Net income increased 21 percent to $469 million, or $1.53 a share, from $389 million, or $1.17, a year earlier, the Los Angeles-based company said today in a statement. Profit from continuing operations of $1.51 a share beat the average estimate of 17 analysts in a Bloomberg survey for $1.32 a share.

The other defense contractors posted earnings too, but none as strong as Northrop Grumman.

Cash for Appliances Program in Florida: Success or Failure?

Remember what a spectacular success Cash for Clunkers was for the car industry? Well apparently Florida began a Cash for Appliances program that was similarly structured. Gov. Charlie Christ claims the program worked fabulously and released a report today detailing its popularity.

Floridians reserved more than 72,700 rebates averaging $241 apiece for energy-efficient appliances last week, according to numbers released today.

The cash-for-appliances program began at 11 a.m. Friday and ran out of money late Saturday.

It is expected to pump at least $62 million into Florida’s economy and generate at least $4 million in tax revenues.

Within the program’s first 24 hours, consumers reserved $15.3 million in rebates. That left $2.2 million in rebates available during the program’s second day.

The “Cash for Appliances” Web site received 300,000 hits per second during its first hours of rebate reservations. Within an hour, consumers reserved more than $7.3 million in rebate funds and $2.9 million in the second hour. By the third hour, reservations slowed to $874,182.

I think the real question to ask about these programs is: is it really helping? Cash for Clunkers certainly sold a lot of cars during the couple of days or weeks it was active, but then there was a subsequent slump in car sales in the months afterwards–it seems as if people who intended to buy cars 4-5 months from then had cashed in and bought the car right then in order to cash in on the government program. All this means is that all of the sales were condensed into a smaller period of time. Will this program have the same result in Florida for appliances? We’ll see.

The Dollar in Danger

The American Dollar has long been the global reserve currency, but critics over the last couple of years, and especially since the onset of the economic crisis, have claimed that the dollar’s status has been hurt and that its status as global reserve currency could be in danger. Standard & Poor’s claimed debt could eventually jeopardize the dollar.

The dollar’s dominant role as global reserve currency hasn’t been challenged by the global credit crunch, Standard & Poor’s said in a report published Thursday. But the ratings firm warned that the U.S. can’t take the dollar’s role for granted. Unless it addresses its fiscal deficit and debt, foreign investors could start to reduce dollar holdings, sending rates sharply higher and undermining the economy, which in turn could threaten the U.S.’s triple-A rating.

This is something that could truly become an issue, both in terms of politics and the economy, over the next couple of years. Let’s hope not.

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