Northrop Grumman Corporation
) has won two contracts from the U.S. Department of Defense
(DoD). The total deal was valued at $522.3 million. In this
occasion, the U.S. DoD has awarded 29 separate orders worth $1.75
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In the first contract worth $490 million, Northrop will offer
follow-on support on interoperability of dissimilar training
systems to fulfill the U.S. Air Force's training needs. This
agreement is part of the Combat Air Force Distributed Mission
Operations and Integration program.
The company's unit Northrop Grumman Information Systems will be
responsible for this program. The activities will take place in
Northrop's facility at Orlando, Fla. and are scheduled to be
completed by Jun 30, 2018 with an option to be extended till Jun
In the second contract, Northrop's unit Integrated Systems has
received an award worth $32.3 million from the U.S. DoD. Per the
agreement, the company will supply spares to support five E-2D
Advanced Hawkeye Full Rate Production Lot 1 Aircraft. The
contract is expected to be completed by Dec 2016.
Northrop has a long-standing business association with the U.S.
defense establishments. Recently, the company received a
contract, worth $115 million, from the U.S. DoD to supply 16
units of AN/APG-68 (V) 9 radar systems to the Royal Thai Air
Force and 22 units of AN/APG-68 (V) 9 radar systems to the
Republic of Iraq.
Northrop is flooded with a number of contracts from several
government establishments and had a total backlog of $39.4
billion at the end of first-quarter 2013. Recently, the company
managed to get few significant contracts. In May 2013, Northrop
won a contract, worth $555.6 million, from the DoD to upgrade
The defense operators' performance primarily depends on the
orders coming from the national and international defense
establishments. With the risk of U.S. defense budget-cuts looming
large. We believe the defense companies' endeavor toward wining
overseas orders will allow them to offset the decline in domestic
Northrop is slated to release its second-quarter 2013 earnings on
Jul 22, 2013. The Zacks Consensus Estimate for second-quarter
2013 is currently $1.71 per share.
Northrop currently has a Zacks Rank #2 (Buy). Other stocks from
the sector that are presently performing well include
The Boeing Company
Alliant Techsystems Inc.
) with a Zacks Rank #2 (Buy).