Northrop Grumman Corp
) received two U.S Navy contracts from the Department of Defense
(DoD) related to the E-2D Advanced Hawkeye airborne early warning
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The contracts are valued at $24.6 million. The first, $17.1
million deal is an extension of a contract that the company
clinched in 2011 and involves purchase of products, fleet and
engineering capabilities that are required to commence production
of Lot 1 E-2D Advanced Hawkeyes. Northrop expects to conclude
this order by Jun 2014.
The second contract worth $7.5 million is also a follow-on
contract under the company's Basic Ordering Agreement that
involves refurbishing of 3 line items on the Hawkeye System that
are used on the E-2D aircrafts. The company expects to wrap up
this task by Jun 3, 2015.
The cutting-edge Hawkeye system is a next generation defense
technology that is capable of monitoring the battlefield with its
well-equipped airborne radars before a strike force. It detects
signs of threats and provides solutions to combat attacks. The
Hawkeye system keeps track of any unfriendly aircrafts,
identifies them and informs the seaborne carriers of any possible
In May 2013, Northrop received a substantial $113.7 million
contract for full-rate production of five Advanced Hawkeye
airborne early warning aircrafts. The company overall secured
contracts totaling $717.0 million from the DoD.
Northrop is expected to derive significant benefits from its
various initiatives. The Triton program in the U.S. and its
international Alliance Ground Surveillance program and EURO HAWK
program in Germany will help retain growth momentum. Moreover,
the proposed 25% increase in Northrop's funding in the 2014
budget would encourage future opportunities.
Northrop currently carries a Zacks Rank #2 (Buy). Other defense
stocks to look out for are Zacks Ranked #2
B/E Aerospace, Inc.
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Alliant Techsystems Inc.
Falls Church, VA-based Northrop Grumman provides systems,
products, and solutions in aerospace, electronics, information
systems, and technical service areas to government and commercial