• First quarter revenues were $397 million, relatively unchanged from $403 million in the first quarter of 1997.
• Earnings before interest and taxes of $40 million increased 14% from $35 million in the same period last year.
• Diluted earnings per share for the quarter were $0.44, up 16% from $0.38 in the year-ago quarter.
• Major new Navy business on track, including Nimitz refueling and New Attack Submarine construction.

NEWPORT NEWS, Va., April 23, 1998 – Newport News Shipbuilding (NYSE: NNS) today reported net earnings of $16 million, or $0.44 per diluted share, for the first quarter of 1998. Earnings before interest and taxes were $40 million. These results compare favorably to last year’s first quarter, when net earnings were $13 million, or $0.38 per diluted share, and earnings before interest and taxes were $35 million. Revenues for the quarter were $397 million versus $403 million a year ago.

Commenting on the results, Chairman and Chief Executive Officer William P. Fricks said, "We had a good quarter, with solid showings from all of our core Navy programs. Our Construction business reported strong year-over-year gains, and contributed to our achievement of double-digit operating margins during the quarter. Overall, we expect to be able to sustain attractive margins in 1998 and beyond.

"Operationally, our Construction business will have a busy first half of the year. In mid-1998, we will complete construction of the carrier Harry S. Truman, the eighth Nimitz class aircraft carrier built by Newport News. In the third and fourth quarters, much of our effort will be devoted to continued construction of the carrier Ronald Reagan (delivery in 2002), as well as planning for construction of the New Attack Submarine, scheduled to begin in early 1999."

Overhaul & Repair also showed solid progress during the quarter, led by strong contributions from the overhaul of Theodore Roosevelt – scheduled for completion in July – and planning for the refueling of the carrier Nimitz. Newport News will begin the refueling and complex overhaul of Nimitz in mid-1998, a project that is expected to take over two years to complete. Nimitz will be the first of the class to be refueled, and marks the beginning of a series of refuelings that are expected to occur every three to five years for the next several decades. Importantly, the Company’s unique facilities and highly skilled personnel position it as the only shipyard currently capable of performing nuclear carrier refuelings.

Fricks also commented on the status of the Company’s commercial program. "Having made the decision to exit this business and restructure our contracts to deliver the last ship in mid-1999, our sole focus in the commercial program is on ensuring the timely delivery of the remaining five vessels. We’re currently on track for the build-out of this program, and we’ve taken steps to leverage the important lessons learned from commercial for the benefit of our core Navy business."

Fricks concluded by noting the positive outlook for the rest of 1998. "Driven by a solid backlog and the Company’s proven expertise in Navy programs, we believe we are on track to deliver consistent and predictable results for the rest of this year and into the future."

Newport News ended the quarter with a contract backlog of $2.5 billion. This backlog is expected to more than double in the second quarter as contracts are signed for the refueling of the carrier Nimitz and construction of the New Attack Submarine.

Newport News Shipbuilding designs and constructs nuclear powered aircraft carriers and submarines for the U.S. Navy and provides lifecycle maintenance services for ships in the Navy fleet. The company employs more than 18,000 people, and has annual revenues of approximately $1.8 billion.