Northrop Bags Army Contract

Northrop Grumman Corp. (NOC - Analyst Report) yesterday bagged a five-year $599 million contract from the U.S. Army to provide laser rangefinders. Northrop Grumman is supplying the army with its universal terrain lightweight designators/rangefinders since 2002. Till date, the company has delivered more than 800 of the systems to the Army.
 
This contract will boost the dwindling backlog of Northrop, which fell to $70.4 billion after the second quarter of fiscal 2009 from $76.9 billion year over year. Northrop’s backlog was affected by the cancellation of the $5.1 billion Kinetic Energy Interceptor program by the U.S. Government.
 
Northrop Grumman’s future success in the competitive defense industry depends upon its ability to develop and market its defense-related products and services to the U.S. Government, as well as its ability to provide the people, technologies, facilities, equipment and financial capacity needed to deliver those products and services with maximum efficiency. The company competes with Force Protection Inc. (FRPT - Snapshot Report), General Dynamics Corp. (GD - Analyst Report) and Boeing Co. (BA - Analyst Report).
 
Based in Los Angeles, California, Northrop Grumman provides products, services and solutions in information and services, aerospace, electronics and shipbuilding to military, government, and commercial customers of United States and beyond. The company is the largest IT service provider to the federal government. In addition, Northrop Grumman is the only nuclear-powered aircraft shipbuilder in the United States. We maintain our long-term Outperform recommendation on the shares.