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Northrop (NOC) Wins a Deal to Support E-2D Hawkeye Program

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Northrop Grumman Corp.’s (NOC - Free Report) business segment, Aerospace Systems, recently secured a modification contract involving the E-2D Hawkeye program. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $43 million, this contract is projected to be completed by December 2025. Per the terms, Northrop will offer non-recurring engineering, logistics support, obsolescence management, cyber security software support, and technical data for supporting E-2D Hawkeye aircraft.

A major portion of this deal will be executed in Melbourne and St. Augustine, FL.

Benefits of E-2D Hawkeye Aircraft

Northrop’s E-2D Advanced Hawkeye Aircraft is equipped to provide battle management, theater air, missile defense and multiple sensor fusion capabilities in an airborne system, which offers the warfighter expanded battlespace awareness, especially in the area of information operations.

Additionally, through its effective radar sensor and robust network-enabled capability, Advanced Hawkeye provides critical, actionable data to joint forces and first responders. All these factors spurred demand for the E-2D Advanced Hawkeye Aircraft and ensured several contracts wins for the company, involving the fleet, which in turn should boost NOC’s revenues in the coming days.

Growth Prospects

Per a Research and Markets report, the global combat aircraft market is expected to witness a CAGR of 4% during the 2020-2025 time period, courtesy of a rise in global threats and geopolitical instabilities and increased spending on defense. These projections should benefit Lockheed along with other combat jet manufacturers like Lockheed Martin (LMT - Free Report) , Boeing (BA - Free Report) and Textron (TXT - Free Report) .

Lockheed’s Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include the F-35 Lightning II Joint Strike Fighter jet, C-130 Hercules airlifter, F-16 Fighting Falcon jet and F-22 Raptor jet.

Lockheed boasts a long-term earnings growth rate of 5.7%.  LMT stock has gained 17.6% in the past year.

Boeing’s Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker and T-7A Red Hawk. The segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.

The Zacks Consensus Estimate for Boeing’s 2022 sales indicates a 34.3% improvement from 2021’s reported figure. BA stock boasts a long-term earnings growth rate of 4%.

Textron’s business unit, Textron Aviation Defense, designs, builds and supports versatile and globally-known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.

Textron boasts a long-term earnings growth rate of 11.8%. TXT stock has gained 24.2% in the past year.

Price Movement and Zacks Rank

Shares of Northrop have gained 35.9% in the past year against the industry's decline of 33.1%.

Zacks Investment Research
Image Source: Zacks Investment Research

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

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