Northrop Gets Navy Contract for E-6B - Analyst Blog


Northrop Grumman Corporation ( NOC ) has received a contract for the Block II Modification of an E-6B Mercury aircraft from the Naval Air Systems Command for $44.3 million. Per the contract, the company will integrate high-speed, secure communications and networking systems on the E-6B aircraft.

This contract is part of the Take Charge and Move Out (TACAMO) strategic communications relay mission. The company will design and produce networking and communications systems. First, it will integrate the systems into the E-6B Systems Integration Laboratory and then on a single E-6B aircraft. It will also provide testing, logistics and training to assist operational fielding.

These E-6B aircrafts help in providing endurable and reliable airborne command, control and communications between the president of the United States, secretary of Defense, and U.S. strategic and non-strategic forces. Due to this contract, the E-6B aircraft will now be able to connect to secure U.S. Department of Defense (DoD) networks at high data rates even during flights.

Moreover, the upgrade will allow users to access information that is essential for their mission from worldwide sources without affecting the operational performance of the aircraft.

Northrop has a strong presence in the Air Force, Space & Cyber Security programs. Its product line is well positioned in high priority categories, such as defense electronics, unmanned aircraft and missile defense. Even in this budget constrained environment, the company's novel approach facilitates customers to exploit emerging technologies for vital defense missions such as TACAMO. The company's diversified revenue and earnings stream also provide support.

However, these positives are offset by apprehensions regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, cost over-runs and reductions in the Afghanistan and Iraq operations.

Los Angeles-based Northrop Grumman supplies a broad array of products and services to the DoD, including electronic systems, information technology, aircraft, space technology, and systems integration services. The company mainly competes with The Boeing Company ( BA ) and Lockheed Martin Corporation ( LMT ).

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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: BA , LMT , NOC

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