Back to top

Image: Bigstock

Northrop (NOC) Wins Deal to Supply Link 16 B Kit Spares

Read MoreHide Full Article

Northrop Grumman Corp.’s (NOC - Free Report) business unit, Northrop Grumman Systems Corp., recently secured a contract for procurement of 25 Link 16 B kits, three Link 16 B kit spares, and two Link 16 flight training device B kits. The agreement has been awarded by the Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $30.9 million, the contract is projected to be completed in September 2023. Per the terms, the aforementioned kits and spare parts will be procured to support the modification of UH-1Y and AH-1Z helicopters. Northrop will also offer Link-16 systems engineering, program management, and logistics support.

The majority of  the work related to this deal will be executed in Woodland Hills, CA.

Northrop & Military Communications

Increasing geopolitical tensions across the globe have prompted nations to strengthen their defense systems manifold. Notably, military communications, including airborne, air-ground, underwater, ground-based, and shipborne communications, form an integral part of a nation’s defense system for safe and secured transmission of data. Consequently, interoperability and better security of military services are the factors driving the growth of the military communications market.  

With North America constituting the largest portion of the global military communications market, buoyed by increasing technological advancements in the region, Northrop enjoys an esteemed position in this market.

Notably, Northrop Grumman offers world-class expertise in tactical data link (TDL) technology, with the company having 60 years of experience in the design and development of TDLs, network planning, management, and control systems for every echelon of battlefield network communication. The company’s TDL solutions are currently employed worldwide to conduct TDL operations using a wide variety of over 30 interfaces and protocols, such as Link 16, Link 11, Joint Range Extension Application Protocol (JREAP), Variable Message Format (VMF), and Link 22.

Such a wide variety of TDLs in its product portfolio must have made Northrop's Link 16 the preferred choice by Pentagon, as is evident from the latest contract win.

Growth Prospects

The global military communications market size is projected to grow from $33.4 billion in 2020 to $40.6 billion by 2025, at a CAGR of 4%, as predicted by the Markets and Markets research firm.  Such solid growth projections should boost Northrop’s top-line performance in the coming days.

The aforementioned growth prospects of the global military communications market bode well for other defense primes as well, which are engaged in the communications market. Lockheed Martin’s (LMT - Free Report) next-generation communication systems include the Whetstone system developed to extend communications to soldiers out of range of conventional networks, Warfighter Information Network - Tactical (WIN-T) system that provides Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) capabilities, and a few more.

L3Harris Technologies’ (LHX - Free Report) product portfolio includes tactical SATCOM terminals, RO Tactical Radio as well as RO-Mobile Awareness program, which provides rapid, global push-to-talk and visual Situational Awareness capabilities for users in remote locations.

Raytheon Technologies’ (RTX - Free Report) Collins Aerospace unit provides modernized military communication systems and sophisticated software-defined radio technologies.

Price Performance

Shares of Northrop have witnessed 5.2% growth in the past year against the industry’s decline of 4.3%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Northrop Grumman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here