Northrop Receives US Defense Funding for Electronic Warfare System - Analyst Blog

Northrop Grumman Corp. ( NOC ) announced that it has received funding from the U.S. Army and the U.S. Navy for the manufacturing of pre-production units of the APR-39D (V) 2 radar warning receiver ("RWR")/electronic warfare management system ("EWMS").

The contract calls for production of 18 APR-39D(V)2 units with delivery expected in late 2014. The contract amount was undisclosed.

The APR-39D(V)2 RWR/ EWMS system is equipped with next-generation technology in a small, lightweight configuration that guards a variety of fixed-, rotary- and tilt-wing aircraft. It maximises survivability by offering enhanced aircrew situational awareness through interactive management of all onboard sensors and countermeasures. The system is able to effectively spot and recognize the nature of threat, their bearing and lethality.

Electronic Warfare System is gaining importance in the U.S. armed forces as focus shifts from Afghanistan and Iran to the more contested Asia-Pacific region. China and North Korea have been aggressively investing in modernizing their electronic warfare systems. This has also prompted the U.S. government to invest a significant amount in these systems.

For FY2015, the government plans to spend 5% ($500 million) of the proposed $11.5 billion expenditure in the science & technology segment to advance their electronic warfare capabilities.

The APR-39D(V)2 RWR/ EWMS programs have witnessed several upgrades in the last few years. Northrop's constant technological innovation efforts have helped the company to receive funding from the military. To date, over 7,000 APR-39 systems have been installed on domestic and international AH-1W/Z, UH-1N/Y, MV-22B, KC-130T, UH-60, OH-58D, CH-53, CH-46, AH-64A/D and CH-47 aircraft.

Northrop seems to be doing well in spite of the budget sequestration plaguing the U.S. defense sector. The company managed to secure a handful of large-value contracts in the first few months of 2014. The most recent being a contract worth $9.9 billion from the U.S. Air Force to offer modernization and support services to the B-2 stealth bomber program.

Currently, Northrop Grumman carries a Zacks Rank #3 (Hold). Other well-placed defense operators include CAE Inc. ( CAE ), Curtiss-Wright Corp. ( CW ) and Leidos Holdings, Inc. ( LDOS ). All these stocks currently carry a Zacks Rank #2 (Buy).

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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 Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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