Sperry Marine business, a unit of Northrop Grumman Corporation (NOC), will supply advanced shipboard navigation systems for 20 fast patrol vessels under a contract with Indian reseller Marine Electricals Ltd. The systems will be supplied to Indian Coast Guard.
The navigation package consists of VisionMaster Total Watch multifunction displays, electronic chart display and information system (:ECDIS), autopilot, magnetic compass and the new NAVIGAT 3000 fibre optic gyrocompass. The pact includes spares, factory testing and engineering support services that will be supplied for fast patrol vessels to be built at Cochi Shipyard Ltd. India.
The company expects the delivery of navigation systems to continue till 2015, with first delivery in late 2012.
Sperry Marine's NAVIGAT 3000 fibre optic gyrocompass has the capability to provide all motion data that is necessary for the faster operation of ships. It maximizes consistency and dynamic angular rate as it delivers the full set of navigation data while on the other hand minimizes the size, weight, noise and power consumption.
Northrop’s integrated bridge system components will provide the Indian Coast Guard with highly developed shipboard navigation systems that are available today. Going forward, the company plans to continue to deliver products that will help in securing India's coastline.
Sperry Marine unit provides smart navigation and ship control solutions for the international marine industry with customer service and support in numerous locations worldwide. Besides, Indian Navy, it has been delivering integrated bridge systems and components to naval and coast guard vessels in several countries around the world. In September this year, Northrop had received a contract to supply navigation bridge equipment for a series of 39,500-dwt dry bulk cargo ships for the China Navigation Company Pte. Ltd. Singapore, which is a deep sea shipping company of the Swire Group.
Overall, Northrop Grumman offers a strong program portfolio positioned to take advantage of the focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program. Moreover, the company’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”).
However, these positives will be offset by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the Department of Defense ("DoD") budget, cost over-runs and reductions in the Afghanistan and Iraq operations. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
Falls Church, Virginia-based Northrop Grumman Corporation supplies a broad array of products and services to the U.S. DoD, including electronic systems, information technology, aircraft, space technology, and systems integration services.
Some of its main competitors that are also facing the threat of budget cuts are Lockheed Martin Corporation (LMT) and General Dynamics Corporation (GD).
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