Northrop Grumman Corp.
) has clinched a U.S. Navy contract for Littoral Combat Ship
("LCS") Mission Modules.
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Per this $25.2 million contract, the company will supply three
added mission module packages, comprising two for surface warfare
missions and one for mine countermeasures. LCS is a fast, highly
maneuverable, networked surface combat ship which engages in
three main missions, namely, mine warfare, antisubmarine warfare
and surface warfare.
Northrop Grumman as a mission package integrator maintains a
disciplined systems engineering process and ensures that the
different components are effectively integrated into the larger
LCS system. Moreover, every mission package entails the
assimilation of manned and unmanned systems that are capable of
operating in all domains whether air, surface or subsurface.
Under the latest contract, the mission modules will help in
modular mission package embarkation, mission package operations
and debarkation. These are essential to LCS' modular Mission
To date, Northrop Grumman has delivered two surface warfare
mission modules. The company has also delivered its first mine
countermeasures mission module for LCS. The second and third mine
countermeasures mission modules, along with the third surface
warfare mission module are also under production.
Northrop Grumman's product line is well positioned in high
priority categories, such as, defense electronics, unmanned
aircraft and missile defense. We expect revenue and earnings
growth to be driven by its strong presence in the current focus
areas of cyber security, modernization of defense and homeland
security assets, intelligence, surveillance and reconnaissance
systems, advanced electronics and software development.
Despite the cuts in defense spending and the threat of
sequestration, the company has been able to seal many contracts
from the Department of Defense. The positive case for Northrop
Grumman stems from revenue growth across the board, a broad
diversification of programs, and an order backlog of
approximately $37.7 billion at the end of second quarter 2013.
Northrop Grumman presently retains a short-term Zacks Rank #2
(Buy). Other well-placed operators include
Lockheed Martin Corp.
Alliant Techsystems Inc.
). While Alliant Techsystems and Lockheed Martin carry a Zacks
Rank #1 (Strong Buy), Raytheon holds a Zacks Rank #2 (Buy).