Income from Continuing Operations Increases 59 Percent

 Earnings per Share from Continuing Operations $1.21 

 Sales Increase 57 Percent to $6.6 Billion

 Cash From Operations Totals $400 Million

 2003 EPS from Continuing Operations Guidance Raised to $4.20 - $4.30

 2003 Guidance for Cash from Operations Raised
 

LOS ANGELES -- Oct. 29, 2003 -- Northrop Grumman Corporation (NYSE:NOC) reported income from continuing operations of $224 million, or $1.21 per share for the 2003 third quarter, compared with $141 million, or $1.17 per share, for the same period of 2002. Third quarter 2003 earnings per share are based on weighted average diluted shares outstanding of 184.5 million versus 115.2 million for the third quarter of 2002. Sales for the 2003 third quarter increased to $6.6 billion from $4.2 billion for the same period of 2002.

Ronald D. Sugar, Northrop Grumman's chairman, chief executive officer and president said, "Northrop Grumman's third quarter results were excellent from every perspective. The strong performance reflects 17 percent organic sales growth in our heritage businesses and solid contributions from our new operating segments. To date, we have accomplished all major 2003 business initiatives, while strengthening our balance sheet. With the TRW integration largely behind us, we are focused on delivering continued superior program performance and becoming the most trusted provider of systems and technologies for national security.

"We are optimistic about Northrop Grumman's future and have increased 2003 earnings per share and cash guidance while maintaining 2004 guidance for double-digit growth in earnings per share. We have won the major programs necessary to ensure continued growth, and we are currently competing for several multibillion dollar programs on the horizon," Sugar added.

Total operating margin for the 2003 third quarter increased 38 percent to $431 million from $313 million in the same period a year ago. Double-digit growth at Electronic Systems, Ships and Integrated Systems, and operating margin from the company's new Mission Systems and Space Technology segments, contributed to the year over year increase. Last year's third quarter results included an $87 million pre-tax charge on Ships Polar Tanker program and a $65 million pre-tax charge on Electronic Systems F-16 Block 60 contract. These third quarter 2002 charges were partially offset by positive pre-tax adjustments of $69 million on Ships cancelled commercial cruise ship program and $20 million on an Information Technology contract.

Total operating margin in the third quarter of 2003 included pension expense of $143 million compared with pension income of $22 million for the 2002 third quarter. The CAS pension expense increased to $64 million in the third quarter of 2003 from $25 million for the comparable 2002 period.

Third quarter total operating margin also includes a $17 million net gain in "Unallocated expenses" resulting from two legal settlements, the subsequent reversal of a previously established reserve, and the establishment of loss provisions for other legal matters. During the third quarter the company settled two civil False Claims Act cases, Newport News and Jordan, for $60 million and $20 million, respectively. As a result of the Newport News settlement, the company reversed a reserve, which, when established, had no effect on the company's net income as it was recorded as a liability on the balance sheet as part of the purchase accounting for the December 2001 acquisition of Newport News. The unused portion of the reserve, approximately $120 million, was reversed in the third quarter, and together with third quarter loss provisions recorded for other legal matters, resulted in the $17 million net gain.

The company also reported a loss from discontinued operations of $46 million, including a goodwill impairment charge of $47 million, in the third quarter of 2003 versus a loss of $178 million, including a goodwill impairment charge of $186 million, in the third quarter of 2002. Net income for the 2003 third quarter was $184 million, or $1.00 per diluted share, compared with a net loss of $59 million, or $.56 per diluted share for the same period of 2002.

Company wide, contract acquisitions increased 7 percent to $4.3 billion in the 2003 third quarter from $4.0 billion reported for the same period a year ago due to the contributions of the Mission Systems and Space Technology segments. The company also won several major contracts this quarter, including approximately $4 billion for Virginia-class submarines and $1.9 billion for the Advanced Hawkeye. Only a small portion of the total value of these contracts is included in third quarter contract acquisitions and funded backlog due to low initial incremental funding. The company's business backlog increased 10 percent to $23.6 billion at Sept. 30, 2003, from $21.5 billion reported a year earlier.

Guidance for 2003/2004

The company now expects 2003 sales to be between $25.5 and $26 billion and increased its 2003 guidance for earnings per share from continuing operations to $4.20 to $4.30 per share from the previous range of $4.00 to $4.25. The company also raised its estimate of 2003 cash from operations, before the March 2003 $1.0 billion B-2 tax payment, to approximately $1.5 billion from its previous range of $1.1 to $1.3 billion. For 2004, the company expects sales of approximately $28 billion and double-digit growth in earnings per share, assuming pension costs are the same as in 2003. Cash from operations for 2004 is expected to total approximately $1.5 billion.

Segment Results

Electronic Systems sales for the third quarter of 2003 increased 16 percent to $1.5 billion from $1.3 billion for the third quarter of 2002. Operating margin for the third quarter of 2003 was $162 million compared with $73 million for the third quarter of 2002. Results for sales and operating margin in the 2003 period include increased volume in Aerospace Electronic Systems F-16 and F-35 programs and Defensive Electronic Systems ALQ-135 and MH-53 programs. Third quarter 2002 operating margin included a $65 million pre-tax charge for the F-16 Block 60 combat avionics program.

Ships sales, which include the financial results of the Newport News and Ship Systems sectors, increased 24 percent to $1.4 billion in the 2003 third quarter from $1.1 billion in the 2002 third quarter. The sales growth reflects increased revenue on the DD(X) program, included in the Surface Combatant business area; and on the LPD program, included in the Amphibious and Auxiliary business area. Operating margin for the third quarter of 2003 was $83 million compared with $50 million for the third quarter of 2002, which included an $87 million pre-tax charge to operating margin on the commercial Polar Tanker program partially offset by a $69 million positive pre-tax adjustment on the cancelled commercial cruise ship program.

Information Technology sales for the third quarter of 2003 increased 9 percent to $1.2 billion from $1.1 billion in the third quarter of 2002 primarily due to strong growth in the Government Information Technology and Enterprise Information Technology business areas. Operating margin for the third quarter of 2003 was $74 million compared with $91 million for the third quarter of 2002. Last year's results included a $20 million positive pre-tax adjustment resulting from the restructuring of a contract included in the Technology Services business area.

Mission Systems sales and operating margin for the third quarter of 2003 were $1.0 billion and $66 million, respectively, led by its Command, Control & Intelligence business area.

Integrated Systems sales rose 21 percent in the third quarter of 2003 to $974 million from $807 million for the third quarter of 2002, primarily reflecting increased F-35 and Global Hawk sales. Operating margin for the third quarter increased 10 percent to $92 million from $84 million for the third quarter of 2002, primarily due to increased E-2C and B-2 operating margin, partially offset by lower Joint STARS operating margin due to reduced volume.Space Technology sales and operating margin for the third quarter of 2003 were $742 million and $53 million, respectively.

Cash and Debt Measurements

Northrop Grumman's total debt at Sept. 30, 2003, declined to $6.4 billion from $9.6 billion at Dec. 31, 2002, primarily reflecting the successful execution of the company's plan to reduce acquired fixed-rate TRW debt. Interest expense for the third quarter of 2003 increased to $118 million from $106 million for the 2002 third quarter. Net debt to total capital at Sept. 30, 2003, decreased to 29 percent from 34 percent at the end of 2002. The company's cash provided by operations for the 2003 third quarter totaled $400 million. Cash provided by operations for the 2002 third quarter was $459 million. During the third quarter the company repurchased 550,000 shares of its common stock at an average price of approximately $86 per share.

About Northrop Grumman

Northrop Grumman Corporation is a $25 billion global defense company headquartered in Los Angeles, Calif. Northrop Grumman provides a broad array of technologically advanced, innovative products, services and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding and space technology. The company employs approximately 120,000 employees and operates in all 50 states and 25 countries and 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 Northrop Grumman believes to be within the definition in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties, and include, among others, statements in the future tense, and all statements accompanied by terms such as "project," "expect," "estimate," "assume," "guidance" or variations thereof. This information reflects the company's best estimates when made, but the company expressly disclaims any duty to update this information if new data becomes available or estimates change after the date of this release.

Such "forward-looking" information is based on numerous assumptions and uncertainties, many of which are outside Northrop Grumman's control. These include Northrop Grumman's ability to successfully integrate its acquisitions including TRW, to realize the preliminary estimates for accounting conformance and purchase accounting valuations for TRW which will be finalized in the 2003 fourth quarter and which may materially vary from these estimates, assumptions with respect to future revenues, expected program performance and cash flows, returns on pension plan assets and variability of pension actuarial and related assumptions, the outcome of litigation and appeals, environmental remediation, divestitures of businesses, successful reduction of debt, successful negotiation of contracts with labor unions, effective tax rates and timing and amounts of tax payments, and anticipated costs of capital investments, among other things. Northrop Grumman'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 various factors, including, without limitation, Northrop Grumman's successful performance of internal plans; government customers' budgetary constraints; 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, information technology; naval vessels, space systems and related technologies, as well as other economic, political and technological risks and uncertainties and other risk factors set out in Northrop Grumman's filings from time to time with the Securities and Exchange Commission, including, without limitation, Northrop Grumman reports on Form 10-K and Form 10-Q.

Northrop Grumman will webcast its security analyst conference call at 2 p.m. EST Oct. 29, 2003. 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             SCHEDULE 1
                      FINANCIAL HIGHLIGHTS
                ($ in millions, except per share)


                                THIRD QUARTER      FIRST NINE MONTHS
                               ----------------  --------------------
                                2003       2002      2003       2002
                               ------     ------   -------    -------
 OPERATING RESULTS HIGHLIGHTS
  Total acquisitions          $ 4,291    $ 4,012  $ 16,621   $ 13,463
  Total sales                   6,619      4,214    19,112     12,376
  Total operating margin          431        313     1,150        980
  Income from continuing
    operations before
    cumulative effect
    of accounting change          224        141       605        471
  Net income (loss)               184        (59)      642       (160)
  Diluted earnings per share
    from continuing operations
    before cumulative effect 
    of accounting change         1.21       1.17      3.21       3.96
  Diluted earnings (loss) per
    share                        1.00       (.56)     3.41      (1.56)

  Net cash provided by 
    operating activities          400        459        25        932

 ---------------------------------------------------------------------
                              SEP 30,          DEC 31,
                              2003(1)           2002*
                             --------         ---------
 BALANCE SHEET HIGHLIGHTS
  Cash and cash equivalents   $   359          $  1,412
  Accounts receivable           2,987             2,949
  Inventoried costs             1,125             1,091
  Property, plant and
    equipment, net              3,921             3,605
  Total debt                    6,413             9,623
  Net debt (2)                  6,054             8,211
  Mandatorily redeemable
    preferred stock               350               350
  Shareholders' equity         14,763            14,322
  Total assets                 33,661            42,326

  Net debt to capitalization
    ratio(3)                       29%               34%

---------------------------------------------------------------------

   * Certain prior year amounts have been reclassified to conform to
     the 2003 presentation.

   (1) 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 TRW 
       acquisition. Final valuations and allocations, which are 
       expected to be completed by December 31, 2003, may differ 
       from the amounts included herein.

   (2) Total debt less cash and cash equivalents.

   (3) Net debt divided by the sum of shareholders' equity and 
       total debt.



              NORTHROP GRUMMAN CORPORATION                  SCHEDULE 2
                    OPERATING RESULTS
           ($ in millions, except per share)

                          CONTRACT                        FUNDED
                         ACQUISITIONS                  ORDER BACKLOG
               ------------------------------------   ---------------
                THIRD QUARTER    FIRST NINE MONTHS     SEPTEMBER 30
               ---------------  -------------------   -------------- 
                2003     2002      2003      2002      2003     2002
               ------   ------    ------    ------    ------   ------
 Electronic
  Systems      $1,175   $1,862    $4,089    $4,451    $6,212   $6,536
 Ships            625      752     2,350     3,806     8,765   10,243
 Information
  Technology    1,161    1,024     3,565     3,101     1,709    1,474
 Mission
  Systems         950       --     2,955        --     2,670       --
 Integrated
  Systems         314      484     2,821     2,374     3,781    3,454
 Space
  Technology      314       --     1,724        --       909       --
 Intersegment
  Eliminations   (248)    (110)     (883)     (269)     (484)    (219)
               ------   ------    ------    ------    ------   ------
 Total 
  Segments     $4,291   $4,012   $16,621   $13,463   $23,562  $21,488
               ======   ======   =======   =======   =======  =======


                        NET SALES               OPERATING MARGIN
               ----------------------------    --------------------
                   THIRD        FIRST NINE      THIRD     FIRST NINE
                  QUARTER          MONTHS      QUARTER      MONTHS
                ------------    ------------  ----------  -----------
                2003    2002    2003    2002  2003  2002* 2003   2002*
                ----    ----    ----    ----  ----  ----  ----   ----
 Electronic
  Systems     $1,522  $1,311  $4,372  $3,811  $162   $73  $431   $272
 Ships         1,366   1,101   3,946   3,335    83    50   181    202
 Information
  Technology   1,198   1,098   3,445   3,063    74    91   203    182
 Mission
  Systems      1,021     --    3,033     --     66    --   196     --
 Integrated
  Systems        974     807   2,778   2,443    92    84   302    277
 Space 
  Technology     742     --    2,123     --     53    --   140     --
 Intersegment
  Eliminations  (204)   (103)   (585)   (276)
              ------  ------ ------- -------  ----   ---  ----   ----
 Total
  Segments    $6,619  $4,214 $19,112 $12,376   530   298 1,453    933
              ======  ====== ======= =======



 Reconciliation to operating margin (1)

   Unallocated expenses                        (17)  (30)  (69)   (83)
   Pension (expense) income                   (143)   22  (423)    68
   Reversal of CAS pension
     expense included above                     64    25   201     74
   Reversal of royalty income
     included above                             (3)   (2)  (12)   (12)
                                              ----  ---- -----    ---
   Operating margin                            431   313 1,150    980

 Interest income                                16     2    45      6
 Interest expense                             (118) (106) (381)  (320)
 Other, net                                     (5)  (11)   23      9
                                               ----  ----  ----   ----
 Income from continuing
   operations before
   income taxes and
   cumulative effect of
   accounting change                           324   198   837    675

 Federal and foreign income
   taxes                                       100    57   232    204
                                              ----  ----  ----  -----
 Income from continuing
   operations before cumulative
   effect of accounting change                 224   141   605    471

 (Loss) income from discontinued
   operations, net of tax                      (46) (178)   36   (177)
 Gain (loss) on disposal of
   discontinued operations,
   net of tax                                    6   (22)    1    (22)
                                             -----  ----  ----   ----
 Income (loss) before cumulative
   effect of accounting change                 184   (59)  642    272

 Cumulative effect of
   accounting change                           --    --    --    (432)
                                              ----  ----  ----   ----
 Net income (loss)                            $184  $(59) $642  $(160)
                                              ====  ====  ====  =====

 Diluted earnings (loss) per share

 From continuing operations
   before cumulative effect of
   accounting change                         $1.21 $1.17$ 3.21 $ 3.96
    (Loss) income from discontinued
   operations, net of tax                     (.24)(1.54)  .20  (1.55)
    Gain (loss) on disposal of
   discontinued operations, net of tax         .03  (.19)   --   (.19)
                                              ----  ----  ----   ----
 Before cumulative effect of
   accounting change                          1.00  (.56) 3.41   2.22
    Cumulative effect of accounting change     --     --   --   (3.78)
                                              ----  ----  ----   ----
 Diluted earnings (loss) per share           $1.00 $(.56)$3.41 $(1.56)
                                              ====  ====  ====  =====


 ----------------------------------------------------------------------

 * Certain prior year amounts have been reclassified to conform to the
   2003 presentation.

 (1) Pension expense is included in determining the sectors' operating
  margin to the extent that the cost is currently recognized under
  government Cost Accounting Standards (CAS). In order to reconcile
  from segment operating margin to total company operating margin,
  these amounts are reported under the caption "Reversal of CAS
  pension expense included above." Total GAAP pension income or
  expense is reported separately as a reconciling item under the
  caption "Pension (expense) income." The reconciling item captioned
  "Unallocated expenses" includes unallocated corporate expenses,
  state tax provisions, and other retiree benefit expenses.


                NORTHROP GRUMMAN CORPORATION                SCHEDULE 3
               ADDITIONAL SEGMENT INFORMATION
                      ($ in millions)


 SALES BY BUSINESS AREA
 WITHIN SEGMENTS                THIRD QUARTER       FIRST NINE MONTHS
                                --------------      -----------------
                                 2003     2002*      2003       2002*
                              -------- --------   --------    --------
 Electronic Systems
    Aerospace Electronic 
      Systems                 $  473    $  371    $ 1,310    $  1,080
    C4ISR&N                      311       321        904         842
    Defensive Electronic 
      Systems                    237       179        643         563
    Navigation Systems           173       159        538         484
    Space Systems                128       103        376         324
    Other                        200       178        601         518
                             -------- --------   --------    --------
                                1,522    1,311      4,372       3,811
                             -------- --------   --------    --------
 Ships
    Aircraft Carriers            462       518      1,460       1,488
    Surface Combatants           405       216      1,097         596
    Amphibious & Auxiliary       271       196        739         585
    Submarines                   157       130        449         415
    Commercial & International    37        15         92         169
    Services & Other              34        56        109         165
    Intrasegment Eliminations     --       (30)        --         (83)
                             -------- --------   --------    --------
                               1,366     1,101      3,946       3,335
                             -------- --------   --------    --------
 Information Technology
    Government Information
       Technology                759       696      2,226       1,972
    Enterprise Information
       Technology                225       195        587         500
    Technology Services          175       172        517         486
    Commercial Information
        Technology                67        54        200         160
    Intrasegment Eliminations    (28)      (19)       (85)        (55)
                              ------- --------   --------     --------
                               1,198     1,098      3,445       3,063
                             -------- --------   --------     --------
 Mission Systems
    Command, Control &
       Intelligence              383                1,150
    Missile Systems              271                  785
    Federal & Civil 
      Information
      Systems                    198                  606
    Technical Services           179                  521
    Intrasegment Eliminations    (10)                 (29)
                              -------            --------
                                                               
                                1,021               3,033
                             --------            --------
 Integrated Systems
    Air Combat Systems            644      465      1,754       1,422
    Airborne Early Warning/
      Electronic Warfare          202      200        629         555
    Airborne Ground 
      Surveillance/
      Battle Management           128      140        397         466
    Intrasegment Eliminations      --        2         (2)         --
                             -------- --------   --------    --------
                                  974      807      2,778       2,443
                             -------- --------   --------    --------
 Space Technology
    Intelligence, 
      Surveillance,
      & Reconnaissance            221                 626
    Civil Space                   145                 390
    Satellite Communications      110                 358
    Missile Defense               100                 287
    Radio Systems                 106                 286
    Technology                     60                 176
                             --------            --------
                                  742               2,123
                             --------            --------

 Intersegment Eliminations       (204)    (103)      (585)       (276)
                             -------- --------   --------     --------
 Total Sales                  $ 6,619 $  4,214   $ 19,112    $ 12,376
                             ======== ========   ========     ========

   * Certain prior year amounts have been reclassified to conform to
     the 2003 presentation.

---------------------------------------------------------------------

 AMORTIZATION OF PURCHASED INTANGIBLES

     Electronic Systems           $ 21     $ 21       $ 64        $ 64
     Ships                          10       11         31          33
     Information Technology          5        5         15          15
     Mission Systems                 9        -         25           -
     Integrated Systems              4        4         11          11
     Space Technology                8        -         25           -
                              -------- --------  ---------  ----------
                                  $ 57     $ 41      $ 171       $ 123
                              ======== ========  =========  ==========
 

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