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NOC to Supply Fire Scouts for Navy

Northrop Grumman Corporation (NOC) was awarded by the U.S. Navy a contract valued at more than $71 million to produce six additional next-generation Fire Scout unmanned helicopters. The Fire Scout unmanned helicopters will provide ship commanders with improved range, endurance and payload capacity.

The Navy plans to purchase a total of 30 aircrafts under a rapid development effort. Northrop Grumman is currently under contract to produce 14 Fire Scouts that are scheduled to be deployed in 2014.

Manufacturing and assembly operations of the new Fire Scout variant are well under way across the country, with work on airframe being made at Bell's facility in Ozark, Alabama, and final assembly being completed at Northrop Grumman's Unmanned Systems Center in Moss Point, Mississippi.

Falls Church, Virginia-based Northrop Grumman Corporation is one of the largest defense contractors in the U.S. The company supplies a broad array of products and services to the U.S. Department of Defense including electronic systems, information technology, aircraft, space technology, and systems integration services. The positive case for Northrop Grumman stems from revenue growth across the board and a broad diversification of programs.

Northrop Grumman offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program. Also, its product line in high priority categories, such as defense electronics, unmanned aircraft and missile defense, gives Northrop Grumman an edge over competition.

Northrop Grumman’s backlog is expected to see further upside in the near future through unmanned aerial vehicle (:UAV) platforms, including Broad Area Maritime Surveillance (:BAMS), Fire Scout and Navy Unmanned Combat Air System (:UCA).

Going forward, Northrop Grumman offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program.

However, these are offset by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, lower backlog, cost over-runs and reductions in Afghanistan and Iraq operations. The company presently retains a short-term Zacks Rank #3 (Hold).

Other stocks to consider are The Boeing Company (BA), Lockheed Martin Corporation (LMT) and FLIR Systems, Inc. (FLIR) with a Zacks Rank #2 (Buy).

Read the Full Research Report on NOC

Read the Full Research Report on FLIR

Read the Full Research Report on BA

Read the Full Research Report on LMT

Zacks Investment Research



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