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Northrop Grumman Updates 2005 Financial Guidance; Provides 2006 Guidance

LOS ANGELES, March 24 /PRNewswire-FirstCall/ -- Northrop Grumman Corporation (NYSE: NOC) will update 2005 financial guidance and provide 2006 financial guidance today at its annual conference for institutional investors held in Redondo Beach, Calif., which will also be webcast via the company Web site, www.northropgrumman.com, beginning at 8 a.m. PST.

The company expects 2005 sales between $31 billion and $31.5 billion and 2006 sales of approximately $33 billion. The 2006 sales estimate assumes the current approved plan of record for the U.S. Navy acquisition for the DD(X) program. Earnings per diluted share from continuing operations in 2005 are now expected to range between $3.60 and $3.75, up from previous guidance of $3.45 to $3.60 per diluted share. The revised 2005 guidance includes an after-tax gain of $45 million, or $0.12 per diluted share, for the recent sale of common shares of TRW Automotive Holdings Corp. (NYSE: TRW). Earnings per diluted share from continuing operations in 2006 are expected to grow by a solid double-digit rate on a percentage basis before the effect in 2005 of the gain on the recent sale of TRW common stock.

Operating margin rate in 2005 is expected to be in the low 7% range and in 2006 is expected to be in the high 7% range, assuming constant pension expense in both years. Net cash provided by operating activities in 2005 is expected to be between $2.2 billion and $2.5 billion and approximately $2.5 billion in 2006.

Northrop Grumman Corporation is a 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 more than 125,000 employees, and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.

Note: Certain statements and assumptions in this release and/or presentation 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 includes, among other things, financial guidance regarding sales, segment operating margin, pension expense, employer contributions under pension plans and medical and life benefits plans, and cash flow, and is subject to numerous assumptions and uncertainties, many of which are outside Northrop Grumman's control. These include Northrop Grumman's 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 and appeals, 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 various 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 and, in connection with any fixed price development programs, controlling cost growth in meeting production specifications and delivery rates; 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; natural disasters and terrorist acts; 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.

SOURCE Northrop Grumman Corporation
03/24/2005
CONTACT: media, Frank Moore, +1-310-201-3335, or investors, Gaston Kent, +1-310-201-3423, both of Northrop Grumman Corporation
Web site: http://www.northropgrumman.com