Defense conglomerate NorthropGrumman (NYSE:NOC) told shareholders today that a delay in the Refueling and Complex Overhaul (RCOH) for the nuclear-powered aircraft carrier USS Carl Vinson would leave a $300 million shortfall in 2004 revenues. The company's response to this loss brings to mind the 1988 Bobby McFerrin smash, "Don't Worry, Be Happy."

Northrop lowered revenue guidance for 2004 from $29 billion to $28 billion. Most shareholders have learned to shudder at the words "lowered guidance." But for Northrop, it meant the target was within the original range. That shows good planning. Defense work can be unpredictable. Don't worry.

Northrop's business is extremely strong. Even with the revenue shortfall, the company's 2004 guidance is for double-digit EPS growth and cash flow from operations of approximately $1.5 billion. That's $8.20 per share in cash flow. Don't worry.

With the stock at around $85, Northrop shareholders who bought in above $100 in recent years are probably wondering when they can be happy again. Nothing is certain, but with the stock trading at 17 times trailing earnings, and operations extremely strong, at least the downside appears limited. Don't worry. Be happy.

Mr. Crotty can be reached at .