Northrop Gets $13.2M Navy Contract
Northrop Grumman Corporation (NOC) has received a firm-fixed-price five-year contract worth $13.2 million from the U.S. Naval Supply Systems Command to provide logistics, material and technical support for the AN/ASN-139 Carrier Aircraft Inertial Navigation System (CAINS II).
Per the contract, Northrop will supply material- and configuration-management services for the AN/ASN-139 CAINS II which will be installed on various U.S. Navy and foreign aircrafts which include C-2A, E-2C, F/A-18, S-3 and AV-8B.
The AN/ASN-139 is a laser gyro strapdown inertial navigation system. Also known as LN-92, AN/ASN-139 allows carrier-based aircraft to offer low life-cycle costs and low maintenance and calibration needs.
Northrop Grumman has been continuously receiving a number of contracts from the U.S. Navy. Last month, the company received a contract from the U.S. Navy for the production of 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.
Northrop is a leading global security company providing innovative systems, products and solutions in unmanned systems, cybersecurity, Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance, and logistics and modernization to government and commercial customers worldwide. The company has a strong presence in Air Force, Space & Cyber Security programs. Northrop’s product line is well positioned in high priority categories, such as defense electronics, unmanned aircraft and missile defense.
Indeed, with the successful spin-off of its Shipbuilding business in Mar 2011, which is now traded as Huntington Ingalls Industries Inc. (HII), Northrop Grumman can now focus on programs with a short business cycle. Revenue and earnings growth continue to be driven by its strong presence in the current focus areas of cyber security, modernization of defense and homeland security assets, intelligence, surveillance and reconnaissance systems, advanced electronics and software development.
However, these positives will be offset by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, cost over-runs and reductions in Afghanistan and Iraq operations. The company presently retains a short-term Zacks Rank #3 (Hold).
Other stocks worth considering are The Boeing Company (BA) and Lockheed Martin Corporation (LMT), both with a Zacks Rank #2 (Buy).
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