Northrop Grumman Trims Earnings Outlook

Northrop Grumman Corp. on Friday trimmed its earnings guidance for this year and next year but raised its revenue outlook for 2002 to account for its pending $2.1-billion acquisition of Newport News Shipbuilding Inc.

Northrop said Thursday that it had signed a deal to buy Newport News, winning a six-month battle against General Dynamics Corp. for control of the submarine and aircraft-carrier builder. The deal is expected to close this month.

Northrop said it expects 2001 earnings of $5.80 to $5.95 a share, before pension income, on sales of about $13 billion; 2002 earnings of $6.60 to $7.10 on sales of about $18 billion; and double-digit earnings growth in 2003 on sales of about $20 billion.

The L.A.-based company, maker of the B-2 bomber, warships and military electronics, previously had said it expected earnings of $6.25 to $6.40 a share this year on $13 billion in revenue and earnings of $6.85 to $7.25 a share in 2002 on revenue of $16 billion.

A spokesman said Friday that Northrop has been saying that the acquisition would be moderately dilutive to 2002 earnings.

Northrop said its revised financial guidance assumes the acquisition of Newport News and the issuance of about $1.2 billion in common stock and equity security units, and reflects its announced plan to suspend work on the Project America cruise ship program.

2003.

On the New York Stock Exchange, Northrop slipped 35 cents to $97.60, Newport News rose 20 cents to $67.95, and General Dynamics rose $1.78 to $82.73.