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Defense operator Northrop Grumman Corporation (NOC - Analyst Report) announced that its unit Northrop Grumman Italia received a $38.4 million (€30 million) contract from Eurofighter Consortium, the prime contractor being Alenia Aermacchi.

Per the contract, the Northrop unit will supply Fibre-optical Gyro Inertial Navigation System and a global positioning system ("GPS") receiver for Tranche 3 of the Eurofighter Typhoon multirole combat aircraft. Northrop Grumman won the contract by virtue of its expertise and past record of supplying sophisticated equipment to the consortium.

The navigation equipment will enhance the capability of these aircrafts by providing digital maps and direct drive display, which will help in improved viewing and integration of the aircraft's avionics.

Northern Grumman has spawned into a global security company with a worldwide customer base. The company has been able to secure international contracts consistently.

In June this year, Northrop received a foreign military sales contract to provide the APG-68(V) 9 airborne fire control radar to Thailand, Iraq and Oman for use on F-16 fighter aircraft.  Per the contract, the company will deliver 6 radar systems to the Royal Thai Air Force, 22 radar systems to the Iraqi Air Force and 15 radar systems to the Royal Air Force of Oman.

Again in July, Northrop received a contract from the civil aviation authority of Chile, Direccion General de la Aeronautica Civil to supply complete ground-to-air communication systems at multiple sites across the country. Per the contract, the company will deliver its latest T6 VHF radios with local technical support.

We believe the steady inflow of international orders to some extent can counter the threat of US defense budget cuts. The majority of defense operators are looking beyond the U.S. to secure orders. In particular, they are eyeing the Asian and the Middle East markets, where defense spending is on an uptrend.

Northrop Grumman Corporation retains a Zacks #2 Rank (Buy rating). The company competes with the likes of Boeing Company (BA - Analyst Report), General Dynamics Corp. (GD - Analyst Report) and Lockheed Martin Corporation (LMT - Analyst Report) in the aerospace and defense industry.

Northrop Grumman Corporation is a leading global security company providing innovative systems, products and solutions in aerospace, electronics, information systems, and technical services to government and commercial customers worldwide.

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