• Revenues grew to $466 million from $450 million in the second quarter of 1997.
• Earnings before interest and taxes of $42 million increased 14% from $37 million in the same period last year.
• Diluted earnings per share for the quarter of $0.45 grew 18% from $0.38 in the year-ago quarter.

NEWPORT NEWS, Va., July 22, 1998 – Newport News Shipbuilding (NYSE: NNS) today reported net earnings of $16 million on revenues of $466 million, or $0.45 per diluted share, for the second quarter of 1998. Earnings before interest and taxes were $42 million. These results compare favorably to last year’s second quarter, when net earnings were $14 million on revenues of $450 million, or $0.38 per diluted share, and earnings before interest and taxes were $37 million.

"We had another good quarter, with strong revenues and solid earnings growth," said Chairman and Chief Executive Officer William P. Fricks. "Importantly, the company continues to show steady year-over-year improvement as we work toward our long term goal of double-digit operating margins. And in addition to solid financial results, we had an excellent quarter in operational terms."

Newport News completed construction of the eighth Nimitz class aircraft carrier, Truman, in the second quarter. Construction of Truman began in 1991 as part of a two-ship contract which included the carrier Stennis. Following successful completion of sea trials, Truman was delivered to the Navy as scheduled on June 30, 1998. Commissioning of the new carrier, marking its official entry into U.S. Navy service, is scheduled for July 25 in Norfolk, Virginia.

Commenting on the event, Fricks said, "There isn’t another shipyard in the world that could deliver a new carrier, continue to build another, and overhaul and refuel carriers simultaneously." Truman was delivered on schedule while achieving significant productivity improvements.

The aircraft carrier Nimitz arrived at Newport News in late May for its first and only nuclear refueling and complex overhaul. A highly complicated operation, the Nimitz refueling will generate revenues to Newport News of approximately $1.2 billion and is expected to require over 30 months to complete.

"Nimitz marks the beginning of a series of ten refuelings for this class of ships, with future refuelings scheduled to occur every three to five years," said Fricks. "The planned nature of these refuelings contributes to a relatively predictable workload for a major portion of our business over the next several decades. We continue to explore ways to enhance our ability to service the Navy’s carriers around the world, and we expect to play an expanded role in carrier life cycle support for decades to come."

Newport News’ contract backlog rose in the second quarter to $3.3 billion, driven by the addition of the Nimitz refueling contract. In the third quarter, the company expects approximately $2 billion to be added to that amount with the planned award of the New Attack Submarine construction contract.

"We are pleased with the quarter’s results and with the continued strong performance in our key business segments," concluded Fricks. "With a healthy backlog and solid quarterly performance, Newport News is well positioned for the rest of 1998 and into the future."

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 18,000 people and has annual revenues of approximately $1.7 billion.