Northrop Grumman Corporation
) announced that it has entered into a strategic alliance with
Wynyard Group to market and develop joint offerings to the US
public sector and commercial markets.
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Wynyard Group is a privately owned company that delivers powerful
software solutions in over 90 countries in the essential
operating areas of risk management, intelligence, investigations
and digital forensics.
The alliance is a win-win situation for both the companies. This
strategic alliance combines the market power, resources and
expertise of Northrop Grumman with Wynyard's leading specialist
knowledge and solutions in risk management, intelligence,
investigations and digital forensics.
Going forward, Northrop Grumman's strong balance sheet and cash
flows provide substantial financial flexibility and a cushion for
improving shareholder value through incremental dividend, ongoing
share repurchases and earnings accretive acquisitions. In the
third quarter of 2012, the company repurchased 4.4 million shares
for approximately $290 million. At the end of the first nine
months of 2012, the company had a low long-term
debt-to-capitalization of 27.0%. Total long-term debt was
approximately $3.9 billion, with no significant maturities in the
near term, along with cash holdings of $3.5 billion.
Falls Church, Virginia-based Northrop Grumman Corporation is one
of the largest defense contractors in the U.S. The company
supplies a broad array of products and services to the U.S.
Department of Defense including electronic systems, information
technology, aircraft, space technology, and systems integration
services. The positive case for Northrop Grumman stems from
revenue growth across the board and a broad diversification of
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. Also, its
product line in high priority categories, such as defense
electronics, unmanned aircraft and missile defense, gives
Northrop Grumman an edge over competition.
Northrop Grumman's backlog is expected to see further upside in
the near future through unmanned aerial vehicle (UAV) platforms,
including Broad Area Maritime Surveillance (BAMS), Fire Scout and
Navy Unmanned Combat Air System (UCA).
Going forward, 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
However, these are 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.
Like its peers,
General Dynamics Corporation
), the company presently retains a short-term Zacks #3 Rank
(Hold) that corresponds with our long-term Neutral recommendation
on the stock.