We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Northrop Grumman Wins $65M Deal to Support Triton UAS Program
Read MoreHide Full Article
Northrop Grumman Corp.’s (NOC - Free Report) subsidiary, Northrop Grumman Systems Corp., recently secured a delivery order in relation to MQ-4C Triton Unmanned Aircraft System (UAS) Multi-Function Active Sensor (MFAS). Work related to the deal is scheduled to be completed by June 2022.
Details of the Deal
Valued at $64.8 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland. Per the terms of the deal, Northrop Grumman will execute low rate initial production of three initial spares operational requirement to support organizational level maintenance of the MQ-4C Triton Unmanned Aircraft System MFAS.
Majority of the work will be conducted in Linthicum and Baltimore, MD; Andover, MA; and Exeter, NH. The company will utilize 2018 aircraft procurement (Navy) funds to complete the task.
A Brief Note on Triton
MQ-4C Triton is a broad-area maritime-surveillance (BAMS) UAS manufactured by Northrop Grumman for the U.S. Navy. It is a high-altitude, long-endurance UAS that provides real-time intelligence, surveillance and reconnaissance (ISR) across vast oceans and coastal regions.
MQ-4C can fly 24 hours per day and seven days a week, with 80% effective time on station (ETOS).
What’s Favoring Northrop?
Unmanned aerial vehicles are relatively easy to maintain and their average price comes at a fraction of the cost of manned aircraft. Moreover, since these are unmanned, if detected in hostile airspace, loss of life is zero. Thus, with increasing geo-political tensions across the world, surveillance through unmanned aircraft vehicles is in vogue lately for ensuring better security of a nation at minimal possibility of casualty.
Of late, Northrop’s Triton UAS is experiencing increased traction in the unmanned aircraft space. In June 2018, the Australian government agreed to purchase six Triton aircraft for a total value of $1.4 billion.
In this context, it is imperative to mention that MFAS — the electronically scanned array radar designed for maritime surveillance missions — is the first sensor system to provide full 360-degree persistent coverage of both open oceans and littoral regions from extremely long ranges. Therefore, offering spare parts pertaining to MFAS is expected to make Triton UAS even more useful for the U.S. Navy, resulting increased demand for these jets.
As the Navy plans to procure 68 such jets for the Unites States, we expect Northrop Grumman to win more deals for production of Triton jets and associated contracts for upgrading them similar to the latest one. These deals, in turn, should expand its profit margin.
Price Performance
In a year’s time, shares of Northrop Grumman have rallied about 9% compared with the industry's 23.3% growth. The underperformance may have been caused by intense competition that the company faces in both domestic and international markets.
Zacks Rank & Key Picks
Northrop Grumman currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) . While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Huntington Ingalls and Engility carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings climbed 30.9% to $1.27 over the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.1% to $2.02 over the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 over the last 90 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Northrop Grumman Wins $65M Deal to Support Triton UAS Program
Northrop Grumman Corp.’s (NOC - Free Report) subsidiary, Northrop Grumman Systems Corp., recently secured a delivery order in relation to MQ-4C Triton Unmanned Aircraft System (UAS) Multi-Function Active Sensor (MFAS). Work related to the deal is scheduled to be completed by June 2022.
Details of the Deal
Valued at $64.8 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland. Per the terms of the deal, Northrop Grumman will execute low rate initial production of three initial spares operational requirement to support organizational level maintenance of the MQ-4C Triton Unmanned Aircraft System MFAS.
Majority of the work will be conducted in Linthicum and Baltimore, MD; Andover, MA; and Exeter, NH. The company will utilize 2018 aircraft procurement (Navy) funds to complete the task.
A Brief Note on Triton
MQ-4C Triton is a broad-area maritime-surveillance (BAMS) UAS manufactured by Northrop Grumman for the U.S. Navy. It is a high-altitude, long-endurance UAS that provides real-time intelligence, surveillance and reconnaissance (ISR) across vast oceans and coastal regions.
MQ-4C can fly 24 hours per day and seven days a week, with 80% effective time on station (ETOS).
What’s Favoring Northrop?
Unmanned aerial vehicles are relatively easy to maintain and their average price comes at a fraction of the cost of manned aircraft. Moreover, since these are unmanned, if detected in hostile airspace, loss of life is zero. Thus, with increasing geo-political tensions across the world, surveillance through unmanned aircraft vehicles is in vogue lately for ensuring better security of a nation at minimal possibility of casualty.
Of late, Northrop’s Triton UAS is experiencing increased traction in the unmanned aircraft space. In June 2018, the Australian government agreed to purchase six Triton aircraft for a total value of $1.4 billion.
In this context, it is imperative to mention that MFAS — the electronically scanned array radar designed for maritime surveillance missions — is the first sensor system to provide full 360-degree persistent coverage of both open oceans and littoral regions from extremely long ranges. Therefore, offering spare parts pertaining to MFAS is expected to make Triton UAS even more useful for the U.S. Navy, resulting increased demand for these jets.
As the Navy plans to procure 68 such jets for the Unites States, we expect Northrop Grumman to win more deals for production of Triton jets and associated contracts for upgrading them similar to the latest one. These deals, in turn, should expand its profit margin.
Price Performance
In a year’s time, shares of Northrop Grumman have rallied about 9% compared with the industry's 23.3% growth. The underperformance may have been caused by intense competition that the company faces in both domestic and international markets.
Zacks Rank & Key Picks
Northrop Grumman currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) . While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Huntington Ingalls and Engility carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings climbed 30.9% to $1.27 over the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.1% to $2.02 over the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 over the last 90 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>