Northrop Grumman Corporation
) has received a firm-fixed-price follow-on production contract
worth $11.5 million from the U.S. Naval Air Systems Command
("NAVAIR") for the fabrication, testing and delivery of
AN/UPX-24("V") interrogator sets for their Aegis combat ships.
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AN/UPX-24(V) consists of a control monitor, a central
processor-controller and up to 22 control indicators, which help to
recognize friendly aircrafts rapidly and precisely. The
AN/UPX-24(V) accepts transponder replies and provides target
reports to a shipboard weapon system. Besides providing target data
to the ship's command, control, communications, computer and
intelligence system, AN/UPX-24 generates interrogation commands in
response to the requests for priority target identification.
Per the contract, Northrop will provide five AN/UPX-24(V)
identification friend or foe ("IFF") processor sets in an
open-architecture pattern to improve the situational alertness and
detection of threat capabilities of naval ships. The production
system deliveries are expected in the first quarter of 2014.
The AN/UPX-24(V) interrogator set, an important element of the
AN/UPX-29(V) shipboard interrogator system, is a major subsystem.
The primary function of the subsystem is to provide centralized
identification system for ships, which help to determine whether
aircraft or ships equipped with IFF transponders are friends or
Northrop Grumman is a leading global security company providing
innovative systems, products and solutions to aerospace,
electronics, information systems, and technical services to
government and commercial customers worldwide. The company 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. Moreover, the company's growth is
supported by favorable projected revenue, diversified revenue and
However, this will be 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 the
Afghanistan and Iraq operations.
Like its peers
General Dynamics Corporation
), the company presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the