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Northrop Grumman Corp.

July 24, 2007: Northrop Grumman (NYSE:NOC) announced today its financial results for the 2nd quarter of 2007, reporting net income increase by 7% to $460 million, operating margin increase of 9% Percent (to $744 Million) reflecting 9.4% Percent of Sales, which grew by 4% to From sales of $7.9 Billion. During the reported period the company generated $741 Million in cash from operations, a significant increase from $638 Million in last year's second quarter.


The company's backlog now stands at $60.4 Billion. "Sales growth, higher segment operating margin, and lower corporate expenses drove this quarter's earnings increase" said Ronald D. Sugar, Northrop Grumman chairman and chief executive officer. He said the company is on track with its guidelines and, based on year-to-date results, he expects "both cash from operations and free cash flow to be in the upper end of our 2007 guidance range".

All the company's business units increased their operating margins, with Information & Services outperforming all other units with 15% increase. Yet, the Aerospace unit's sales declined 6% from the prior year period, due to lower volume in the Integrated Systems division, reflecting changing status of some of its major operations, including E-2D, F-35 and EA-18G, the J-UCAS program nearing completion and planned reductions in the E-10A platform and related MP-RTIP efforts.

Electronics unit operations increased by 7%, mainly from Army and some classified programs, however, it was negatively affected by about $50 million from contract earnings adjustment of elements related to the F-16 Block 60 fixed price development program, ASPIS II EW and MESA radar systems. Second quarter 2007 shipbuilding and naval operations sales declined 5% from the prior year period due to lower volume in the DDG 51 and LHD programs which also suffered from the strike at the company's Pascagoula, Miss. Shipyard.

April 24, 2007: Northrop Grumman Corporation (NYSE:NOC) reported that first quarter 2007 income from continuing operations was $387 million, or $1.10 per diluted share, (up 7% from $362 million, or $1.03 per diluted share, in Q1/06). Sales for the period increased 4 percent to $7.3 billion.

Funded contract acquisitions for the 2007 first quarter totaled $9 billion compared with $12.3 billion for the same period of 2006. First quarter 2006 funded contract acquisitions were positively impacted by the receipt of awards deferred from the fourth quarter of 2005 due to the delay in the passage of the 2006 defense budget. The company expects 2007 sales to range between $31 and $32 billion and earnings per diluted share to range between $4.80 and $5.05. Net cash provided by operating activities is expected to range between $2.5 and $2.8 billion for the whole year.

"Although results were slightly impacted by a strike in Pascagoula, our employees are now back at work building great ships. With this quarter's sound operating performance and strong cash from operations, we are well positioned to achieve our 2007 financial targets. Our performance continues to support a balanced cash deployment strategy, which in the first quarter included a 23 percent increase in our dividend and a $600 million accelerated share repurchase, retiring approximately 8 million shares," Sugar concluded.

Information & Services increased sales by 10%. Mission Systems sales increase reflects revenue from the January 2007 acquisition of the Essex Corporation and higher volume for several missile systems programs, which was partially offset by lower volume in command, control and intelligence programs. Sales at the Aerospace group declined 5% percent from Q1/06 due to lower volume in Integrated Systems which declined 10% due to lower volume for the E-2D Advanced Hawkeye, F-35 and EA-18G programs, as these programs transition from development to production. These declines were partially offset by better results with F/A-18, Euro Hawk and B-2 logistic support. Space Technology sales increased 3%, primarily due to higher volume for military communications satellites and missile & space defense programs, partially offset by lower volume for Civil Space programs. In total, Integrated Systems operating margin rose 8% over the prior year period, reflecting additional F/A-18 deliveries, and improved performance on new production lot 6 aircraft and B-2 programs.

In the first quarter 2007 ships sales rose 2% including revenues related to aircraft carrier, LPD, Coast Guard Deepwater and submarines. These programs were partially offset by lower volume in the DDG 51 and LHD programs due to a now-concluded labor strike at the company's Pascagoula, Mississippi shipyard, and lower volume on the DDG 1000 program as it transitions from development to detail design and production. Despite the strike, operating margin increased 16% from the prior year period due to higher volume and improved performance on the LPD and Virginia-class Block II submarine programs.



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