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NEWPORT NEWS SHIPBUILDING’S FIRST QUARTER
EPS UP 19 PERCENT
EPS Estimates
for the full year increased by 10 percent
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NEWPORT NEWS, Va., April 25, 2001
– 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.
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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.
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