On Sep 27, 2013, the U.S. Department of Defense (DoD)
disbursed 113 separate contracts worth $10.92 billion with
Northrop Grumman Corp.
) winning 10 or approximately 9% of the total contracts awarded.
The company received a sizeable $795.9 million modification
contract to provide logistics support to Air Mobility Command
aircraft at several stateside airbases. The contract runs through
Sept. 30, 2015.
Per the second contract, the company will design, develop, build,
integrate, furnish, evaluate and support an In-flight
Refueling-Capable E-2D Advanced Hawkeye airborne early warning
aircraft for the U.S. Navy. This cost-plus-incentive-fee contract
worth $226.7 million is scheduled to be completed by Jan 2019.
The third contract worth $114.2 million calls for the company to
purchase long-lead items needed to build three Low Rate Initial
Production Lot 11 Block 30 Global Hawk drones. The contract is
scheduled to be completed by Feb 28, 2015.
The seven remaining contracts though small in value will add to
the top line of the company. Per a $36.8 million contract, the
company will continue to run on-orbit operations and sustainment
for Missile Defense Agency Space Tracking and Surveillance
Systems from Oct 2013 through Mar 2015. A firm-fixed-price
contract worth $28.1 million calls for the company to supply the
Air Force with aircraft aft deck structural supports by Nov 30,
Other wins included a contract to support the C-130 Direct Sales
Public-Private Partnership through Sep 26, 2014; a contract to
support Defense Support Program spacecraft and sensors in orbit,
as well as to support and give in-depth missile threat analysis
on-site to the Space and Missile Systems Center's 2nd Space
Warning Squadron through Sep 30, 2014 and a contract to provide
engineering and software sustainment services to the U.S. Navy in
support of Navy MQ-8B Fire Scout unmanned helicopters through Jun
A contract calls for the company to support the AN/TYQ-23(V)4
Tactical Air Operations Module, AN/TYQ-87(V)2 Sector Anti-Air
Warfare Facility, Tactical Air Operations Module Interface Group,
Multi-Radar Tracker, Multi-Channel Interface Unit, and critical
components of the AN/TSQ-269 Mobile Tactical Air Operations
Module and provide other support services to the U.S. Marine
Corps through Sep 26, 2014. Per the final contract, the company
will maintain and upgrade AN/APG-68 radar systems on Air Force
Block 30 F-16 fighter aircraft.
Despite the threat of sequestration, we note that defense players
like Northrop Grumman,
Lockheed Martin Corp.
The Boeing Co.
) have continued to receive small as well as sizeable contracts.
Indeed, the latest handout from the DoD worth $10.92 billion is
approximately equal to two weeks' worth of contracts at any other
time of the year. Contract wins are gathering pace as the DoD
fiscal year draws to a close.
Northrop, Raytheon and Lockheed Martin presently have a
short-term Zacks Rank #2 (Buy).
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
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