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Shipbuilder 2Q to beat Street
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June 28, 1999: 8:01 p.m. ET
Newport News expects EPS to exceed expectations by 2 to 4 cents
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NEW YORK (CNNfn) - Newport News Shipbuilding Inc. said Monday its second-quarter earnings likely will beat analysts' estimates by between 2 cents and 4 cents per share on the basis of stronger margins in its core business.
Analysts had expected the company, which constructs nuclear-powered aircraft carriers and submarines for the U.S. Navy, to earn 51 cents per share in the second quarter compared with 45 cents a share a year ago, according to First Call Corp., which tracks such estimates.
Including one-time, pre-tax gains totaling $25 million, the company expects to post earnings of between 93 cents and 95 cents a share, approximately 40 cents of which are attributable to the one-time gains, said Newport News spokesperson Jerri Fuller.
"The favorable one-time items together with the continued strong operating performance will combine to produce an exceptional quarter," said Bill Fricks, chairman and chief executive officer.
The company also said continued productivity improvements and redeployed cash flow should allow it to exceed expectations throughout 1999.
The pre-tax gains consist of termination fees associated with the Avondale Industries Inc. (AVDL) merger agreement and settlements of insurance claims on completed contracts.
Newport News had offered to buy Avondale in January, but lost to a rival bid from Litton Industries Inc. (LIT) in June.
The $20 million in termination fees will be partially offset by about $5 million in deal-related expenses incurred by Newport News.
Additionally, the company said it will recognize a $10 million gain from insurance settlements related to previously completed ship construction projects.
-- from staff and wire reports
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