Northrop Gets DoD Contracts - Analyst Blog

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Defense manufacturer, Northrop Grumman Corp ( NOC ) received two U.S Navy contracts from the Department of Defense (DoD) related to the E-2D Advanced Hawkeye airborne early warning aircraft.

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 danger.

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. ( BEAV ), Wesco Aircraft Holdings Inc. ( WAIR ) and Alliant Techsystems Inc. ( ATK ).

Falls Church, VA-based Northrop Grumman provides systems, products, and solutions in aerospace, electronics, information systems, and technical service areas to government and commercial customers worldwide.



ALLIANT TECHSYS (ATK): Free Stock Analysis Report

B/E AEROSPACE (BEAV): Free Stock Analysis Report

NORTHROP GRUMMN (NOC): Free Stock Analysis Report

WESCO AIRCRAFT (WAIR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ATK , BEAV , NOC , WAIR

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