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Northrop Wins $286M Navy Contract for E-2D Hawkeye Jet

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Defense contractor Northrop Grumman CorporationNOC won a foreign military sales contract from the U.S. Navy for one E-2D Advanced Hawkeye aircraft for the government of Japan. The contract, worth $285.9 million, was provided by The Naval Air Systems Command, Patuxent River, MD.

Per the contract, Northrop will provide non-recurring manufacturing and recurring efforts to support the production and delivery of the Hawkeye aircraft.

Work is expected to be complete by Sep 2019. The company will carry out 81% of the work in Melbourne, FL and the rest in St. Augustine, FL; Herndon, VA and in other locations within the U.S.

Hawkeye is an airborne, all-weather, early warning system used by the Navy. E-2D is the fourth version of the E-2 Hawkeye. The technology and gadgets fitted in this aircraft increase its visibility on targets far away. E-2D Advanced Hawkeye has a structurally distinctive design - a rotating rotodome and four vertical stabilizer tail configuration - that provides 360-degree surveillance at all times.

The Hawkeye jets, which have been used for several purposes like surveillance and tracking of missiles, proved itself indispensable to the Navy in recent times.

In light of rising security threats due to growing terrorism, Obama emphasized on intelligence, surveillance and reconnaissance ("ISR") activities in the FY16 defense bill. This made other countries realize the urgent need for ISR technologies. This is likely to be immensely beneficial for Northrop.

Northrop Grumman is the fourth largest U.S. defense contractor in terms of 2014 revenue, with a major platform-centric focus. The company has a strong presence in the Air Force, and Space & Cyber Security programs. Northrop's product line is well positioned in high-priority categories, such as defense electronics, unmanned aircraft and missile defense.

Northrop's product innovation and focus on strengthening its ISR wing will help maintain a stable earnings stream in light of the changing needs of the defense landscape. It also increased its profit outlook for 2015.

Zacks Rank

Northrop currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the aerospace and defense sector include Leidos Holdings, Inc. LDOS , General Dynamics Corporation GD and Huntington Ingalls Industries, Inc. HII . While Leidos sports a Zacks Rank #1 (Strong Buy), both General Dynamics and Huntington Ingalls carry the same Zacks Rank as Northrop.

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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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