Northrop Grumman Corp.
) won a modification contract from the U.S. Air Force for its
Global Hawk unmanned aircraft system. This contract has a total
value of $71 million.
Global Hawk is an unmanned aircraft system and has the capability
to fly for over 30 hours at an altitude of more than 60,000 feet
and boasts of near-real-time intelligence surveillance and
reconnaissance/ISR and efficient communications relay
competencies. In fiscal 2012, Global Hawk operated at a
mission-capable rate of nearly 78% that surpassed the U.S. Air
Force's prerequisite for 19 successive months.
The success of this unmanned aircraft system has led to the
extension of the existing contract. Per the agreement, the
company will provide program management, engineering, and flight
operations support to complete Lot 10 aircraft and sensor
The deliveries include two Block 30 Global Hawk aircrafts, two
more advanced Block 40 drones, and three ASIP retrofits. Northrop
expects all work on this contract modification to be completed by
the end of 2014.
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Northrop Grumman is the fourth largest U.S. defense contractor
The Boeing Company
Lockheed Martin Corporation
) in terms of full year 2012 revenue.
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.
The company's backlog, which stood at approximately $40.8 billion
at the end of 2012, 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 likely 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.
Northrop currently carries a Zacks Rank #3 (Hold).