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Northrop Grumman Corp. (NOC - Analyst Report) received a $173.0 million contract yesterday from the U.S. Department of Defense (DoD) for offering support and sustainment services to the military’s LITENING advanced targeting system.

The LITENING system is extensively used by the Air Combat Command, Air National Guard, Marine Corps and Marine Corps Reserves as well as the Air Force Reserves. In addition to the U.S. Northrop will extend its support services to the naval forces of Italy and Spain.

The five-year performance based logistic contract will see Northrop providing technical support to the field, aircrew and maintenance training, logistics support, depot repairs and other related services.

The LITENING system comes with diverse features like forward-looking infrared, charged-coupled device, laser imaging sensors, advanced image processing and digital video output. This enables the aircrew to effectively recognize and engage targets in various battlefield situations. This system has been introduced in a wide range of Coalition aircraft.

Most of the contract wins by Northrop in the first half of 2013 included systems support and maintenance services. The company has been focusing on its technological innovation skills. Currently, Northrop is working on the modernization of United Kingdom airborne warning and control system Sentry programs.

We believe the initiatives will continue to fetch lucrative contracts for the company in the upcoming quarters. In May 2013, Northrop secured an impressive $555.6 million DoD contract, one of its biggest in 2013, for the upgrade of Global Hawk unmanned aerial vehicles.

Northrop Grumman Corp currently has a Zacks Rank #3 (Hold). Other defense industry majors worth considering now are Zacks Ranked #2 (Buy) Spirit AeroSystems Holdings Inc. (SPR - Snapshot Report), The Boeing Company (BA - Analyst Report) and Hexcel Corp. (HXL - Snapshot Report).

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