Northrop Pockets Four Contracts

Northrop Grumman Corporation (NOC - Analyst Report) has recently bagged four small contracts from the Pentagon, totaling approximately $116.6 million. Of this, the largest is a $58 million Army contract to complete a counter-rocket artillery and mortar system. 

Work on the contract will be performed in Huntsville , Alabama facility. The company expects to complete the contract by the end of the third quarter of fiscal 2010. The Pentagon also awarded a $42 million Navy contract to build spare and repair parts for weapons-system navigation and radars. 

Work on the contract will be performed in the Charlottesville , Virginia facility and is expected to be completed by Oct 2012. The company also received a $9.6 million Air Force contract for a preliminary design for a communications system for the MQ-9 Reaper, an unmanned aerial vehicle. Lastly, another $7 million was awarded to Northrop to work on an integrated base-defense system for the Army. 

Work on this contract will be performed in Herndon , Virginia facility and is expected to be completed by October 2010. These contracts 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. Though Northrop Grumman is one of the largest defense contractors, its backlog was affected by the cancellation of the $5.1 billion Kinetic Energy Interceptor program by the U.S. Government. 

Based in Los Angeles , California , Northrop Grumman provides products, services, and solutions in information and services, aerospace, electronics and shipbuilding to the military, government and commercial customers of the 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.