Moody's: Northrop Grumman outlook now positive

Moody's Investors Service said it confirmed the Baa3 senior, unsecured debt rating of Northrop Grumman Corp. and changed the outlook to positive.

In changing the company's outlook to positive, the rating agency noted that it expects the company's operating performance and cash flows to improve over time as a result of increasing revenue growth in the U.S. market due to the increases in defense spending, the fact that the company's core competency is in areas that are expected to grow faster than the overall U.S. defense spending, and the company's focus on improving operations and cash flow generation going forward.

Moody's said that furthermore, the company has succeeded in strengthening its balance sheet by reducing its acquisition debt and leverage through the recent sale of TRW's automotive business, and by eliminating the overhanging tax liability related to the B-2 program by making the $1 billion payment in the first quarter of 2003.

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