Still, the acquisition had a profound effect on Northrop's balance sheet, pushing long-term debt to $5.3 billion as of June 30, up from $1.6 billion as of Dec. 31, 2000. What's more, increased costs cut operating profit to 7.5 percent of revenues for second quarter ended June 30, down from 17.1 percent in the like period a year ago.

Overall, Northrop Grumman reported net income of $114 million ($1.28 per diluted share) for the quarter, compared with $178 million ($2.55) for the like period a year ago.

Expected revenue climb

Anticipating the hit, Northrop's stock dipped 10.8 percent between the April 2 Litton acquisition and the July 25 announcement of second quarter results. Revenues were $3.7 billion, vs. $1.9 billion a year earlier. That, and the prospect of future growth, helped the stock rebound.

Having posted $7.6 billion in revenues last year, Northrop is expecting a three-year revenue climb, due primarily to the Litton acquisition. Northrop spokesman Frank Moore confirmed the company's forecast of $13.5 billion in revenues for 2001, with estimates of $16 billion and $18 billion for 2002 and 2003, respectively.

Northrop executives declined to comment on either financial figures or potential developments with the Pentagon due to a self-imposed quiet period at the end of the third quarter.

Northrop's fortunes and those of shareholders could be further buoyed by decisions due from the Pentagon regarding production of two aircraft: The Joint Strike Fighter and the potential restart of the B-2 Stealth Bomber program.

A decision by the Pentagon between Boeing Co. and Lockheed, of which Northrop would be a secondary contractor, for the Joint Strike Fighter is due by the end of the month. Northrop's Dallas-based Integrated Systems subsidiary would do about 17 percent of the work on the 3,000-aircraft, $200 billion project.

More intriguing is the potential decision on the B-2, 21 of which were produced by Northrop between 1993 and 2000.

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