NEWPORT NEWS, Va., Oct. 9, 2003 (PRIMEZONE) -- Northrop Grumman Corporation (NYSE:NOC) said today that it is working closely with the U.S. Navy to address the implications of the Navy's decision, announced earlier today, to delay by one year the planned Refueling and Complex Overhaul (RCOH) of the nuclear-powered aircraft carrier USS Carl Vinson. The ship, originally scheduled to arrive at the corporation's Newport News sector in November of 2004, will now arrive in November of 2005.
In response to the Navy's announcement, Tom Schievelbein, president, Northrop Grumman Newport News said, "This issue is critical to us from a people perspective. We are working with the Navy to address the change in the CVN 70 schedule and to find ways to maintain critical technical capabilities at the yard and to stabilize the industrial base."
The company stated that the delay will impact Northrop Grumman's expected 2004 sales by approximately $300 million. The company now expects 2004 sales of approximately $28 billion, versus the previously estimated range of $28 to $29 billion. This is the only change to the company's previous guidance for 2004, which included double-digit earnings per share growth, assuming pension costs are the same as 2003, segment operating margin in the mid-7 percent range, and cash from operations of approximately $1.5 billion.
"As a result of the Vinson schedule change," added Schievelbein, "the Navy plans to award Northrop Grumman Newport News a Dry Dock Planned Incremental Availability (DPIA) for the carrier USS George Washington (CVN 73) that will begin in the fall of 2004, as well as a number of submarine availabilities and other additional work."
This decision by the Navy to change the Vinson's maintenance schedule was made because of the carrier's current operational capabilities and to better address the Navy's operational needs.
Northrop Grumman Newport News, headquartered in Newport News, Va., is the nation's sole designer, builder, and refueler of nuclear-powered aircraft carriers and one of only two companies capable of designing and building nuclear-powered submarines. Newport News also provides after-market services for a wide array of naval and commercial vessels. The Newport News sector employs about 18,000 people.
Northrop Grumman Corporation is a $25 billion global defense company, headquartered in Los Angeles, Calif. Northrop Grumman provides technologically advanced, innovative products, services and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding and space technology. With approximately 120,000 employees and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.
Forward-Looking Information -- Note: Certain statements and assumptions in this release contain or are based on "forward-looking" information (that Northrop Grumman believes to be within the definition in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties, and include, among others, statements in the future tense, and all statements accompanied by terms such as "project," "expect," "estimate," "assume," "guidance" or variations thereof. This information reflects the company's best estimates when made, but the company expressly disclaims any duty to update this information if new data becomes available or estimates change after the date of this release.
Such "forward-looking" information is based on numerous assumptions and uncertainties, many of which are outside Northrop Grumman's control. These include Northrop Grumman's ability to successfully integrate its acquisitions including TRW, to realize the preliminary estimates for accounting conformance and purchase accounting valuations for TRW which will be finalized in the 2003 fourth quarter and which may materially vary from these estimates, assumptions with respect to future revenues, expected program performance and cash flows, returns on pension plan assets and variability of pension actuarial and related assumptions, the outcome of litigation, appeals and settlement negotiations, environmental remediation, divestitures of businesses, successful reduction of debt, successful negotiation of contracts with labor unions, effective tax rates and timing and amounts of tax payments, and anticipated costs of capital investments, among other things. Northrop Grumman's operations are subject to various additional risks and uncertainties resulting from its position as a supplier, either directly or as subcontractor or team member, to the U.S. Government and its agencies as well as to foreign governments and agencies; actual outcomes are dependent upon factors, including, without limitation, Northrop Grumman's successful performance of internal plans; government customers' budgetary constraints; customer changes in short-range and long-range plans; domestic and international competition in both the defense and commercial areas; product performance; continued development and acceptance of new products; performance issues with key suppliers and subcontractors; government import and export policies; acquisition or termination of government contracts; the outcome of political and legal processes; legal, financial, and governmental risks related to international transactions and global needs for military aircraft, military and civilian electronic systems and support, information technology; naval vessels, space systems and related technologies, as well as other economic, political and technological risks and uncertainties and other risk factors set out in Northrop Grumman's filings from time to time with the Securities and Exchange Commission, including, without limitation, Northrop Grumman reports on Form 10-K and Form 10-Q.