Northrop Grumman Corporation
) 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
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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
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
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
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
Lockheed Martin Corporation
FLIR Systems, Inc.
) with a Zacks Rank #2 (Buy).