Northrop LITENING Order Extended - Analyst Blog

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Northrop Grumman Corporation ( NOC ) has received a four-year extension contract worth $8 million in support of the Laser Infrared Targeting and Navigating ("LITENING") Advanced Targeting ("AT") system used on F/A-18 Hornet aircraft ("HTDS"). The contract has been awarded by Royal Australian Air Force ("RAAF") for its Target Designation System. As per the terms of the deal, Lockheed will provide in-service support for the targeting pods and data links through September 2015.

F/A-18 Hornet aircraft is a supersonic, single seat or tandem seat, twin engine, fighter and attack aircraft that can be operated irrespective of weather and can be refueled in flight. The multi-mission aircraft can be operated from both aircraft carriers and land bases. Apart from the F/A-18 Hornet aircraft, the LITENING pods are customized for AV-8B, A-10A/C, B-52H, EA-6Bs, F-15E, F-16 and F/A-18.

The LITENING AT system is a self-contained, multi sensor, weapon-aiming system with advanced image processing that allows fighter pilots to detect targets for highly accurate delivery of both conventional and precision-guided weapons. Also, it is well integrated to support air-to-air as well as air-to-ground engagements.

The system features a 640 x 512 pixel forward-looking infrared sensor that enables effective day and night operations. Moreover, a 1,024 x 1,024 pixel charge-coupled device television sensor, a dual waveband infrared laser designator and eye-safe laser range finder, a laser spot tracker, an infrared laser marker; and an optional air-to-ground video data link and digital video recorder add value to the system.

Besides being in operation with RAAF, LITENING is operated by such vanguards of defense such as the U.S. Air Force, Air National Guard, Air Force Reserve Command, the U.S. Marine Corps, the Italian and Spanish navies, the Israeli Air Force, the Royal Netherlands Air Force, the Finnish Air Force, and the Portuguese Air Force.

Recently, the company also received a $690.0 million fixed-price-incentive-firm contract from the U.S. Air Force for the Laser Infrared Targeting and Navigating Targeting Pod System. Under the contract, the company will fulfill the requirements based on hardware and software upgrades and associated host platform integration, initial spares, technical manual and technical orders and also provide support for the standup of organic depot repair requirements for the sustainment of the legacy LITENING pod fleet.

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. However, this is 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 #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Based in Los Angeles Northrop Grumman supplies a broad array of products and services to the U.S. Department of Defense (DoD), including electronic systems, information technology, aircraft, space technology, and systems integration services.  Some of its main competitors include General Dynamics Corporation ( GD ) 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.



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