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Northrop Grumman Corp.
(NOC - Analyst Report) was awarded a $148.6 million contract by the U.S. Navy. According to the agreement, Northrop will provide engineering services to support the Navy for the development of a prototype and a missile launcher system. The job will run for a year with an option for extension by another year.
 
In June, Northrop has already received two contracts from the U.S. Navy. The first one valued at $73.4 million for five years pertains to providing maintenance for aircraft carrier, modernization planning, work package development and integration along with work package execution.
 
The second pertains to providing scalable integrated bridge systems for five Nimitz-class U.S. Navy aircraft carriers. The fixed-price contract was awarded to the company’s Maritime Systems business unit.
 
Northrop Grumman is one of the largest defense contractors in the U.S. and continues to benefit from high defense spending. The company has a diversified portfolio of programs with strong order bookings and order backlog, strong cash flow generation and focus on shareholder value.
 
Ending first quarter of 2010, the company’s order backlog was worth $67.5 billion. Going forward, growth is expected to be driven by cyber security, intelligence, surveillance and reconnaissance.
 
Prime competitors of the company include Boeing Co. (BA - Analyst Report), General Dynamics Corp. (GD - Analyst Report) and Lockheed Martin Corporation (LMT - Analyst Report). We are currently maintaining a Neutral recommendation on Northrop.

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