Newport News Shipbuilding's First Quarter EPS Up 19 Percent

EPS Estimates for the Full Year Increased by 10 Percent



Apr 25, 2001, 01:00 ET from Newport News Shipbuilding

    NEWPORT NEWS, Va., April 25 /PRNewswire/ -- Newport News Shipbuilding
 (NYSE:   NNS) today reported net earnings of $24 million, or $0.75 per diluted
 share, for the first quarter of 2001.  Earnings before interest and taxes
 (EBIT) for the quarter were $51 million, up from $47 million last year.
     "We are pleased to start 2001 with a continuation of our very strong
 financial track record," commented Chairman and Chief Executive Officer
 William P. Fricks.  "Performance gains across our major programs have resulted
 in revenues and earnings that exceeded our earlier estimates.  As a result, we
 are increasing our 2001 EPS estimates by 10 percent over prior guidance of
 between $3.05 and $3.10 before any transaction related expenses associated
 with the proposed acquisition of Newport News by General Dynamics
 Corporation."
     Newport News posted first quarter revenues of $485 million, up from $469
 million in the first quarter of 2000.  The favorable revenue comparison was
 driven by strong gains in the Construction segment.  "First quarter 2001
 Construction revenues advanced 12 percent compared to the first quarter of
 2000," said Fricks.  "Increased volume on the Virginia-class submarine program
 coupled with the build-up on the new CVN 77 carrier construction contract
 drove the growth in this segment."
     Fleet Services revenues of $185 million decreased slightly as the Nimitz
 refueling and overhaul approaches its mid-2001 delivery date.  "Revenues will
 start to trend upward in Fleet Services later in the year as we begin the
 refueling and overhaul of the carrier Eisenhower," noted Fricks.  "Our
 Engineering segment's revenues of $67 million were consistent with the prior
 year's quarter."
     "EBIT for the first quarter was $51 million, up from $47 million last year
 as a result of both volume growth and margin improvement," said Fricks.  "We
 also reached final agreement on a simplified overhead allocation system.  The
 resulting reallocation of costs in the quarter increased revenues and
 operating earnings in the Fleet Services segment by about $3 million, with a
 corresponding decrease in the Construction segment.  Finally, free cash flow
 for the quarter was $44 million, or $1.39 per share, continuing the strong
 cash performance we've delivered over the past several years."
     Newport News' backlog increased to $6.9 billion at the end of the first
 quarter with the $3.8 billion contract award for CVN 77 in January 2001.  The
 Company expects another significant addition to the backlog during the second
 quarter with the signing of the Eisenhower refueling and overhaul contract.
 
     Newport News Shipbuilding designs and constructs nuclear powered aircraft
 carriers and submarines for the U.S. Navy and provides lifecycle services for
 ships in the Navy fleet.  The Company employs about 17,200 people, and has
 revenues of approximately $2 billion.
 
 
                           Newport News Shipbuilding Inc.
                   Consolidated Statement of Earnings (Unaudited)
                   Dollars in Millions, Except Per Share Amounts
 
                                                             First Quarter
                                                        2001              2000
 
     Revenues                                          $ 485             $ 469
     Operating Costs and Expenses                       (434)             (423)
     Other Income (Expense), net                          --                 1
     Earnings Before Interest and Taxes (EBIT)            51                47
     Interest Expense, net                               (11)              (11)
     Earnings Before Income Taxes                         40                36
     Provision for Income Taxes                          (16)              (15)
     Net Earnings                                        $24               $21
     Earnings Per Share
         _ Basic                                       $0.80             $0.65
         _ Diluted                                     $0.75             $0.63
     Weighted Average Shares (in millions)
         _ Basic                                        29.6              32.1
         _ Diluted                                      31.4              33.2
 
 
                           Newport News Shipbuilding Inc.
                     Revenues and EBIT by Activity (Unaudited)
                                Dollars in Millions
 
                                                             First Quarter
                                                        2001              2000
     Revenues:
         Construction                                  $ 231             $ 206
         Fleet Services                                  185               192
         Engineering                                      67                68
         Related Businesses & Other                        2                 3
           Total                                       $ 485             $ 469
 
     Operating Earnings:
         Construction                                  $  27             $  24
         Fleet Services                                   20                17
         Engineering                                       4                 5
         Related Businesses & Other                       --                 1
           Total                                       $  51             $  47
 
 
                          Newport News Shipbuilding Inc.
                        Selected Financial Data (Unaudited)
                                Dollars in Millions
 
                                                                         Year
                                                 Quarter Ended           Ended
                                           03/18/2001   03/19/2000   12/31/2000
 
     Cash and Marketable Securities           $     3     $     2     $     3
     Short-Term Debt                               29          29          29
     Long-Term Debt                               473         495         498
     Net Debt (Total Debt net of Cash)            499         522         524
     Shareholders' Equity                         259         260         258
     Total Debt-to-Capital                        66%         67%         67%
 
     Backlog ($ billions) (1)                 $   6.9     $   4.1     $   3.1
     Capital Expenditures (Year-to-Date)            3           2          35
     Depreciation & Amortization
      (Year-to-Date)                               14          14          55
 
     Employment                                17,200      17,200      17,000
     Ending Shares Outstanding (millions)        29.6        31.4        29.7
 
     Notes:
     (1) Funded backlog was $6.1 billion, $3.1 billion, and $2.2 billion at
         3/18/01, 3/19/00, and 12/31/00, respectively.
 
     CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE
     PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
     This news release contains forward-looking statements concerning, among
 other things, the company's prospects, expectations and business objectives
 and strategies. In this release, these forward-looking statements are
 identified by terms and phrases such as, but not limited to, "outlook,"
 "estimates," "expectation," "expects," "expect to," "future," "goal,"
 "anticipation," "targeted," "will ensure," "will be," "will assume," "will
 act," "will increase" "will provide," "will start," "once under contract,"
 "should," "objectives," "on track," "progresses toward," and "scheduled."
 Readers are cautioned that these statements are based on assumptions that are
 subject to risks and uncertainties.  No assurance can be given that the
 company's actual results will not differ materially from the results discussed
 in these statements. Factors that might cause such a difference include, but
 that are not limited to, those discussed in the company's 2000 Annual Report
 to Stockholders and in Item 1 of the company's 2000 Annual Report on Form 10-K
 (under the caption "Government Contracting, Claims and Investigations") and in
 Note 13 ("Commitments and Contingencies -- Government Contracting and --
 Significant Estimates") and Note 3 ("Commitments and Contingencies --
 Government Contracting") to the Consolidated Financial Statements of the
 company contained in its 2000 Annual Report on Form 10-K.
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Newport News Shipbuilding
    NEWPORT NEWS, Va., April 25 /PRNewswire/ -- Newport News Shipbuilding
 (NYSE:   NNS) today reported net earnings of $24 million, or $0.75 per diluted
 share, for the first quarter of 2001.  Earnings before interest and taxes
 (EBIT) for the quarter were $51 million, up from $47 million last year.
     "We are pleased to start 2001 with a continuation of our very strong
 financial track record," commented Chairman and Chief Executive Officer
 William P. Fricks.  "Performance gains across our major programs have resulted
 in revenues and earnings that exceeded our earlier estimates.  As a result, we
 are increasing our 2001 EPS estimates by 10 percent over prior guidance of
 between $3.05 and $3.10 before any transaction related expenses associated
 with the proposed acquisition of Newport News by General Dynamics
 Corporation."
     Newport News posted first quarter revenues of $485 million, up from $469
 million in the first quarter of 2000.  The favorable revenue comparison was
 driven by strong gains in the Construction segment.  "First quarter 2001
 Construction revenues advanced 12 percent compared to the first quarter of
 2000," said Fricks.  "Increased volume on the Virginia-class submarine program
 coupled with the build-up on the new CVN 77 carrier construction contract
 drove the growth in this segment."
     Fleet Services revenues of $185 million decreased slightly as the Nimitz
 refueling and overhaul approaches its mid-2001 delivery date.  "Revenues will
 start to trend upward in Fleet Services later in the year as we begin the
 refueling and overhaul of the carrier Eisenhower," noted Fricks.  "Our
 Engineering segment's revenues of $67 million were consistent with the prior
 year's quarter."
     "EBIT for the first quarter was $51 million, up from $47 million last year
 as a result of both volume growth and margin improvement," said Fricks.  "We
 also reached final agreement on a simplified overhead allocation system.  The
 resulting reallocation of costs in the quarter increased revenues and
 operating earnings in the Fleet Services segment by about $3 million, with a
 corresponding decrease in the Construction segment.  Finally, free cash flow
 for the quarter was $44 million, or $1.39 per share, continuing the strong
 cash performance we've delivered over the past several years."
     Newport News' backlog increased to $6.9 billion at the end of the first
 quarter with the $3.8 billion contract award for CVN 77 in January 2001.  The
 Company expects another significant addition to the backlog during the second
 quarter with the signing of the Eisenhower refueling and overhaul contract.
 
     Newport News Shipbuilding designs and constructs nuclear powered aircraft
 carriers and submarines for the U.S. Navy and provides lifecycle services for
 ships in the Navy fleet.  The Company employs about 17,200 people, and has
 revenues of approximately $2 billion.
 
 
                           Newport News Shipbuilding Inc.
                   Consolidated Statement of Earnings (Unaudited)
                   Dollars in Millions, Except Per Share Amounts
 
                                                             First Quarter
                                                        2001              2000
 
     Revenues                                          $ 485             $ 469
     Operating Costs and Expenses                       (434)             (423)
     Other Income (Expense), net                          --                 1
     Earnings Before Interest and Taxes (EBIT)            51                47
     Interest Expense, net                               (11)              (11)
     Earnings Before Income Taxes                         40                36
     Provision for Income Taxes                          (16)              (15)
     Net Earnings                                        $24               $21
     Earnings Per Share
         _ Basic                                       $0.80             $0.65
         _ Diluted                                     $0.75             $0.63
     Weighted Average Shares (in millions)
         _ Basic                                        29.6              32.1
         _ Diluted                                      31.4              33.2
 
 
                           Newport News Shipbuilding Inc.
                     Revenues and EBIT by Activity (Unaudited)
                                Dollars in Millions
 
                                                             First Quarter
                                                        2001              2000
     Revenues:
         Construction                                  $ 231             $ 206
         Fleet Services                                  185               192
         Engineering                                      67                68
         Related Businesses & Other                        2                 3
           Total                                       $ 485             $ 469
 
     Operating Earnings:
         Construction                                  $  27             $  24
         Fleet Services                                   20                17
         Engineering                                       4                 5
         Related Businesses & Other                       --                 1
           Total                                       $  51             $  47
 
 
                          Newport News Shipbuilding Inc.
                        Selected Financial Data (Unaudited)
                                Dollars in Millions
 
                                                                         Year
                                                 Quarter Ended           Ended
                                           03/18/2001   03/19/2000   12/31/2000
 
     Cash and Marketable Securities           $     3     $     2     $     3
     Short-Term Debt                               29          29          29
     Long-Term Debt                               473         495         498
     Net Debt (Total Debt net of Cash)            499         522         524
     Shareholders' Equity                         259         260         258
     Total Debt-to-Capital                        66%         67%         67%
 
     Backlog ($ billions) (1)                 $   6.9     $   4.1     $   3.1
     Capital Expenditures (Year-to-Date)            3           2          35
     Depreciation & Amortization
      (Year-to-Date)                               14          14          55
 
     Employment                                17,200      17,200      17,000
     Ending Shares Outstanding (millions)        29.6        31.4        29.7
 
     Notes:
     (1) Funded backlog was $6.1 billion, $3.1 billion, and $2.2 billion at
         3/18/01, 3/19/00, and 12/31/00, respectively.
 
     CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE
     PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
     This news release contains forward-looking statements concerning, among
 other things, the company's prospects, expectations and business objectives
 and strategies. In this release, these forward-looking statements are
 identified by terms and phrases such as, but not limited to, "outlook,"
 "estimates," "expectation," "expects," "expect to," "future," "goal,"
 "anticipation," "targeted," "will ensure," "will be," "will assume," "will
 act," "will increase" "will provide," "will start," "once under contract,"
 "should," "objectives," "on track," "progresses toward," and "scheduled."
 Readers are cautioned that these statements are based on assumptions that are
 subject to risks and uncertainties.  No assurance can be given that the
 company's actual results will not differ materially from the results discussed
 in these statements. Factors that might cause such a difference include, but
 that are not limited to, those discussed in the company's 2000 Annual Report
 to Stockholders and in Item 1 of the company's 2000 Annual Report on Form 10-K
 (under the caption "Government Contracting, Claims and Investigations") and in
 Note 13 ("Commitments and Contingencies -- Government Contracting and --
 Significant Estimates") and Note 3 ("Commitments and Contingencies --
 Government Contracting") to the Consolidated Financial Statements of the
 company contained in its 2000 Annual Report on Form 10-K.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X21233735
 
 SOURCE  Newport News Shipbuilding