LOS ANGELES, Oct. 24, 2001 (PRIMEZONE) -- Northrop Grumman Corporation (NYSE:NOC) today reported third quarter 2001 economic earnings of $161 million, a 58 percent increase compared with $102 million in economic earnings reported for the third quarter of 2000. For the quarter, 2001 economic earnings were $1.79 per share on average diluted shares outstanding of 86.2 million, compared with economic earnings of $1.44 per share on average diluted shares outstanding of 71.1 million for the comparable period in 2000.

Under Generally Accepted Accounting Principles (GAAP), the company reported third quarter 2001 net income of $117 million, or $1.28 per share, compared with net income from continuing operations of $150 million, or $2.11 per share, reported for the third quarter last year. The comparable decline reflects a substantial decrease in pension income.

Sales for the quarter ended Sept. 30, 2001, more than doubled to $3.6 billion, compared with $1.7 billion reported for the third quarter of 2000, primarily due to the Litton acquisition and organic growth in Electronic Systems and Information Technology (formerly Logicon). Northrop Grumman's operating margin for the quarter increased to $285 million compared with the $242 million reported for the same period a year ago. Sector operating margin increased 79 percent, driven by increases in Integrated Systems and Electronic Systems. Total operating margin for the 2001 third quarter included $89 million of pension income, down from the $130 million reported in the third quarter of 2000.

"I am very pleased with today's results, which reflect significant increases in sales, operating margin and economic earnings," said Kent Kresa, Northrop Grumman's chairman and chief executive officer. "Our Integrated Systems sector achieved a 41 percent increase in operating margin, while our Electronic Systems sector generated organic growth in sales of 28 percent and operating margin of 59 percent. Our Information Technology sector reached a significant milestone, generating $1 billion in both sales and contract acquisitions for the quarter, underscoring our commitment to the dynamic IT marketplace. Also, we remain on track to achieve our 2001 economic earnings target of $6.25-$6.40 as well as double-digit economic earnings growth in 2002."

Mr. Kresa added, "Over the last decade Northrop Grumman has transformed itself into a company well suited to meet the changing nature of the 21st century military conflicts. We are proud that so many of our systems and platforms have been successfully deployed in Operation Enduring Freedom. Along with the entire defense industry, we stand ready to support our customers and provide what America needs going forward."

Also, Mr. Kresa added, "We are pleased with the Department of Defense's statement yesterday allowing Northrop Grumman to go forward with its proposed acquisition of Newport News Shipbuilding (NYSE:NNS). We do not expect any issues with the Department of Justice on closure of the acquisition and look forward to a successful completion of this transaction in the near future."

For the 2001 third quarter, Northrop Grumman's contract acquisitions totaled $3.4 billion compared with $2.0 billion in contract acquisitions for the third quarter of 2000. The company's business backlog at Sept. 30, 2001, increased to $16.6 billion, compared with the $9.1 billion reported a year earlier, primarily due to the addition of the Litton business backlog.

Electronic Systems sector sales in the third quarter of 2001 were $1.2 billion compared with the $688 million reported in the third quarter of 2000. The increase is due to the inclusion of Litton's Advanced Electronics business, higher automation and information sales and, in the Aerospace Electronic Systems business area, higher land combat systems and combat avionics systems revenues. Operating margin for the quarter increased to $99 million compared with $44 million for the same period last year, reflecting the addition of the Litton business and improved performance in land combat systems and the automation and information business.

Information Technology sector reported third quarter sales of $1.0 billion and operating margin of $53 million compared with sales of $377 million and operating margin of $29 million reported in the third quarter of 2000. The increases are due to the addition of Litton's Information Systems business, sales generated by Federal Data and Sterling's Federal Systems Group - companies acquired in the fourth quarter of 2000 - and double-digit organic sales and margin growth. Last year's third quarter operating margin included a $5 million noncash positive adjustment related to retiree benefits.

Integrated Systems sector generated sales of $718 million in the third quarter of 2001, up slightly from the $706 million reported for the same period a year ago. Operating margin for the quarter was $72 million compared with $51 million reported in the third quarter of 2000, reflecting $20 million of contract closeouts, $10 million improvement on Joint STARS and downward cumulative margin rate adjustments on unmanned vehicle contracts totaling $10 million. Ship Systems sector generated sales of $528 million and operating margin of $18 million. Operating margin was negatively impacted by goodwill and purchased intangibles amortization, which totaled $22 million for the third quarter.

Following American Classic Voyages Company's (AMCV) bankruptcy filing on Oct. 19, Ship Systems is continuing to work on the AMCV cruise ship program subject to Project America's ability to secure immediate financing for the balance of the contract. The completion of this financing is contingent upon U.S. Maritime Administration loan guarantees. Should the contract be terminated, Northrop Grumman expects to report a charge to operating margin of approximately $60 million in the third quarter.

Component Technologies reported sales for the quarter of $142 million and an operating loss of $20 million. Component Technologies margin was impacted by the continued downturn in the telecommunications industry and reflects the effect of $24 million of additional amortization due to the acquisition of Litton. Component Technologies continues to generate solid performance in its non-telecommunications business.

For the 2001 third quarter the company generated $206 million of cash from operations. The company expects to generate approximately $100 million of cash available to pay down debt in 2001.

Northrop Grumman's net debt at Sept. 30, 2001, was $5.0 billion, up from the $1.3 billion reported at Dec. 31, 2000, reflecting both the assumption of Litton debt and increased borrowings to finance the Litton acquisition. Interest expense for the third quarter was $108 million, up from the $43 million reported for the third quarter of 2000.

As previously announced, on Oct. 19, 2001, the company completed its acquisition of the Electronics and Information Systems Group of Aerojet-General Corporation for $315 million in cash. The acquisition will be recorded in the fourth quarter of 2001 and is now part of the Electronic Systems sector's new Space Systems Division.

Northrop Grumman Corporation is a $15 billion global aerospace and defense company with its worldwide headquarters in Los Angeles. Northrop Grumman provides technologically advanced, innovative products, services and solutions in defense and commercial electronics, systems integration, information technology and non-nuclear shipbuilding and systems. With approximately 80,000 employees and operations in 44 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.

Note: Certain statements and assumptions in this release contain or are based on "forward-looking" information (that the company believes to be within the definition in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties. Such "forward-looking" information includes the statements above as to future impacts on revenues and earnings. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the company's control. These include the company's ability to successfully integrate the operations of Litton, assumptions with respect to future revenues, expected program performance and cash flows, the outcome of contingencies including litigation, environmental remediation, divestitures of businesses, and anticipated costs of capital investments. The company's operations are subject to various additional risks and uncertainties resulting from its position as a supplier, either directly or as subcontractor or team member, to the U.S. Government and its agencies as well as to foreign governments and agencies; actual outcomes are dependent upon factors, including, without limitation, the company's successful performance of internal plans; government customers' budgetary restraints; customer changes in short-range and long-range plans; domestic and international competition in both the defense and commercial areas; product performance; continued development and acceptance of new products; performance issues with key suppliers and subcontractors; government import and export policies; acquisition or termination of government contracts; the outcome of political and legal processes; legal, financial, and governmental risks related to international transactions and global needs for military aircraft, military and civilian electronic systems and support and information technology; as well as other economic, political and technological risks and uncertainties and other risk factors set out in the company's filings from time to time with the Securities and Exchange Commission, including, without limitation, the company's reports on Form 10-K and Form 10-Q.

Northrop Grumman will webcast its security analyst conference call at 2 p.m. E.D.T. on October 24, 2001. A live audio broadcast of the conference call will be available on the investor relations page of the company's Web site at http://www.northropgrumman.com .

  NORTHROP GRUMMAN CORPORATION
                          FINANCIAL HIGHLIGHTS
                    QUARTER ENDED SEPTEMBER 30, 2001
                   ($ in millions, except per share)
 
 
                               THIRD QUARTER         FIRST NINE MONTHS
                             2001*        2000       2001*        2000
 
 FINANCIAL METRICS
  (Other Data)
  Economic earnings (1)  $   161     $   102     $   399     $   323
  Economic earnings
   per share (1)         $  1.79     $  1.44     $  4.78     $  4.59
 
  Net cash provided by
   operating
    activities           $   206     $   195     $   192     $   596
 
  EBITDAP (2)            $   406     $   225     $ 1,000     $   721
  EBITDAP per share (2)  $  4.71     $  3.17     $ 12.35     $ 10.27
 
                                        Preliminary
                                           SEP. 30       DEC. 31
 BALANCE SHEET DATA                         2001*          2000
 
  Cash and cash equivalents               $   310       $   319
  Accounts receivable                       2,297         1,557
  Inventoried costs                         1,246           585
  Property, plant and equipment, net        2,086         1,015
  Total debt                                5,319         1,615
  Net debt (3)                              5,009         1,296
  Mandatorily redeemable preferred stock      350            --
  Shareholders' equity                      5,423         3,919
  Total assets                            $17,222       $ 9,622
 
  Debt to capitalization ratio (4)             48%           29%
 
 *   Includes preliminary estimates of the fair market value of the
     assets acquired and  liabilities assumed and the related
     allocations of the purchase price related to the Litton
     acquisition.  Final valuations and allocations, which are
     expected to be completed by December 31, 2001, may differ from
     the amounts included herein.
 
 (1) Diluted earnings from continuing operations available to common
     shareholders per share excluding pension income and amortization
     of goodwill and other purchased intangibles, after tax. The
     company believes that economic earnings is a better performance
     metric of operating results.  Pension income is a noncash item,
     which is impacted more by market conditions than by the entity's
     results from operations.  Amortization of goodwill and other
     purchased intangibles are also noncash items, which do not
     require recurring cash outflows for replenishment and upgrades
     like property, plant and equipment.
 
 (2) Earnings before interest expense, interest income, federal and
     foreign income taxes, depreciation, amortization and pension
     income.
 
 (3) Total debt less cash and cash equivalents.
 
 (4) Total debt divided by the sum of shareholders' equity,
     mandatorily redeemable preferred stock and total debt.
 
 
                       NORTHROP GRUMMAN CORPORATION
                            OPERATING RESULTS
                     ($ in millions, except per share)
 
 
                                       CONTRACT ACQUISITIONS
                               THIRD QUARTER         FIRST NINE MONTHS
                             2001*        2000       2001*        2000
 
  Electronic Systems       $ 1,002     $ 1,020     $ 4,220    $ 3,259
  Information Technology     1,064         336       3,137      1,144
  Integrated Systems           420         702       1,483      1,695
  Ship Systems                 734          --       6,558         --
  Component Technologies       235          --         516         --
  Intersegment
   Eliminations                (44)        (25)       (186)      (128)
 
  TOTAL                    $ 3,411     $ 2,033     $15,728    $ 5,970
 
                                                 FUNDED
                                              ORDER BACKLOG
                                                 SEP. 30
                                           2001*          2000
 
  Electronic Systems                     $ 6,023       $ 4,830
  Information Technology                   1,427           573
  Integrated Systems                       3,557         3,775
  Ship Systems                             5,481            --
  Component Technologies                     216            --
  Intersegment Eliminations                 (124)          (98)
 
  TOTAL                                  $16,580       $ 9,080
 
                                           NET SALES
                              THIRD QUARTER          FIRST NINE MONTHS
                           2001*         2000        2001*        2000
 
  Electronic Systems     $ 1,239      $   688      $ 3,176    $ 1,953
  Information
   Technology              1,047          377        2,653      1,180
  Integrated Systems         718          706        2,217      2,371
  Ship Systems               528           --        1,077         --
  Component Technologies     142           --          300         --
  Intersegment
   Eliminations              (69)         (40)        (169)      (115)
 
  TOTAL                  $ 3,605      $ 1,731      $ 9,254    $ 5,389
 
 
 *   Includes preliminary estimates of the fair market value of the
     assets acquired and  liabilities assumed and the related
     allocations of the purchase price related to the Litton
     acquisition.  Final valuations and allocations, which are
     expected to be completed by December 31, 2001, may differ from
     the amounts included herein.
 
 
                        NORTHROP GRUMMAN CORPORATION
                             OPERATING RESULTS
                      ($ in millions, except per share)
 
 
                                        OPERATING MARGIN
                              THIRD QUARTER          FIRST NINE MONTHS
                            2001*        2000        2001*        2000
 
  Electronic Systems      $    99     $    44      $   214    $   126
  Information
   Technology                  53          29          125         93
  Integrated Systems           72          51          216        264
  Ship Systems                 18          --           51         --
  Component
   Technologies               (20)         --          (26)        --
            Total         $   222     $   124      $   580    $   483
 
       Other items
        included in
         operating
          margin:
        Corporate
         expenses             (19)         (5)         (58)       (16)
        Deferred state
         tax provision         (7)         (7)         (21)       (31)
        Pension income         89         130          249        410
 
  Operating margin            285         242          750        846
 
  Other income, net            16          41           64         45
  Interest expense           (108)        (43)        (269)      (135)
 
  Income from continuing
   operations before
    taxes                     193         240          545        756
 
  Federal and foreign
   income taxes                76          90          211        275
 
  Income from continuing
   operations                 117         150          334        481
 
  Income from discontinued
   operations, net of tax                   4                      39
 
  Loss on disposal of
   discontinued operations,
    net of tax                            (22)                    (37)
 
  Net income              $   117     $   132      $   334    $   483
 
 
  Diluted earnings per
   share
     Continuing
      operations          $  1.28     $  2.11      $  3.97    $  6.84
     Discontinued
      operations               --        0.06           --       0.55
     Disposal of
      discontinued
       operations              --       (0.31)          --      (0.52)
     Diluted earnings
      per share           $  1.28     $  1.86      $  3.97    $  6.87
 
 
 *   Includes preliminary estimates of the fair market value of the
     assets acquired and  liabilities assumed and the related
     allocations of the purchase price related to the Litton
     acquisition.  Final valuations and allocations, which are
     expected to be completed by December 31, 2001, may differ from
     the amounts included herein.
 
                            NORTHROP GRUMMAN CORPORATION
                           ADDITIONAL SEGMENT INFORMATION
                                   ($ in millions)
 
 
 Sales by business area
  within segment:               THIRD QUARTER       FIRST NINE MONTHS
                             2001*        2000      2001*        2000
 Electronic Sensors
  & Systems
  Aerospace Electronic
   Systems                 $   390     $   260    $ 1,154     $   808
  C3I&N                        224         215        665         576
  Navigation Systems           274          --        512          --
  Defensive Electronic
   Systems                     198         117        460         320
  Other                        153          96        385         249
   Total                     1,239         688      3,176       1,953
 
 Information Technology
  Government Information
   Technology              $   655     $   186    $ 1,548     $   572
  Enterprise Information
   Technology                  195          17        544         118
  Technology Services          133         125        375         360
  Commercial Information
   Technology                   64          49        186         130
    Total                    1,047         377      2,653       1,180

 Integrated Systems
  ACS                      $   361     $   379    $ 1,173     $ 1,331
  AEW/EW                       180         166        534         545
  AGS/BM                       175         165        516         511
  Intrasegment
   Eliminations                  2          (4)        (6)        (16)
    Total                      718         706      2,217       2,371
 
 Ship Systems              $   528     $    --    $ 1,077     $    --
 
 Component Technologies    $   142     $    --    $   300     $    --
 
 
 *   Includes preliminary estimates of the fair market value of the
     assets acquired and  liabilities assumed and the related
     allocations of the purchase price related to the Litton
     acquisition.  Final valuations and allocations, which are
     expected to be completed by December 31, 2001, may differ from
     the amounts included herein.
 
 
                       NORTHROP GRUMMAN CORPORATION
                      ADDITIONAL SEGMENT INFORMATION
                              ($ in millions)
 
 
                                 THIRD QUARTER       FIRST NINE MONTHS
   Amortization of Goodwill   2001*         2000     2001*        2000
 
 Electronic Systems         $    21      $    15   $    59     $    45
 Information Technology          16            4        42          12
 Integrated Systems               8            8        24          23
 Ship Systems                    11           --        20          --
 Component Technologies          21           --        30          --
              Total              77           27       175          80
 
   Amortization of          THIRD QUARTER       FIRST NINE MONTHS
    Purchased Intangibles     2001*         2000     2001*        2000
 
 Electronic Systems         $    23      $    19   $    60     $    57
 Information Technology           8            1        10           1
 Integrated Systems               3            3        11          11
 Ship Systems                    11           --        15          --
 Component Technologies           3           --         7          --
              Total         $    48      $    23   $   103     $    69
 
   Amortization of Goodwill
    and Other Purchased          THIRD QUARTER       FIRST NINE MONTHS
        Intangibles           2001*         2000     2001*        2000
 
 Electronic Systems         $    44      $    34   $   119     $   102
 Information Technology          24            5        52          13
 Integrated Systems              11           11        35          34
 Ship Systems                    22           --        35          --
    Component Technologies       24           --        37          --
              Total         $   125      $    50   $   278     $   149
 
 
  *   Includes preliminary estimates of the fair market value of the
      assets acquired and liabilities assumed and the related
      allocations of the purchase price related to the Litton
      acquisition.  Final valuations and allocations, which are
      expected to be completed by December 31, 2001, may differ from
      the amounts included herein.
 
  -0-
CONTACT:  Northrop Grumman Corporation, Los Angeles
          Frank Moore (Media)
          (310) 201-3335

          Gaston Kent (Investors)
          (310) 201-3423