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Northrop (NOC) Secures Navy Deal to Aid E-2D Hawkeye Aircraft

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Northrop Grumman Corp. (NOC - Free Report) recently clinched a contract involving the E-2D aircraft. The award has been offered by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.  

Details of the Deal

Valued at $15.5 million, the contract is projected to be completed by September 2025. Per the terms of the deal, Northrop will provide overhaul of power amplifier modules to support the E-2D aircraft.

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

Importance of E-2D Advanced Hawkeye

Northrop’s E-2D Advanced Hawkeye aircraft boasts battle management, theater air, missile defense and multiple sensor fusion capabilities in an airborne system. These offer the warfighter expanded battlespace awareness, especially in the area of information operations.

Through its effective radar sensor and robust network-enabled capability, Advanced Hawkeye provides critical, actionable data to joint forces and first responders. Such features of the aircraft make it attractive for the military, thus resulting in NOC winning multiple orders for the same, like the latest one. The new orders are likely to boost the revenue-generation prospects of Northrop from the military aircraft business arena.

Growth Prospects

Countries globally have been reinforcing their military resources due to intense geopolitical tensions and amplified terrorist threats. To this end, a military aircraft that forms an integral part of any air defense system is likely to witness pent-up demand.

Per a report from Mordor Intelligence, the military aircraft market is projected to witness a CAGR of 4% over the 2022-2031 period. Such growth prospects may benefit Northrop Grumman as its military aviation system offers a wide range of manned and unmanned aircraft that already enjoys an established position in the military aircraft market.

The abounding growth prospects should benefit defense majors that have forayed into the military aircraft market. These include 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, the C-130 Hercules airlifter, the F-16 Fighting Falcon jet and the F-22 Raptor jet.

Lockheed Martin’s long-term earnings growth rate is pegged at 6.2%. Shares of LMT have returned 26.9% value to investors 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 long-term earnings growth rate of Boeing is pegged at 4%. The Zacks Consensus Estimate for BA’s 2022 sales suggests growth of 5.4% from the prior-year reported figure.

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 the Beechcraft T-6C trainer and AT-6 Wolverine.

Textron boasts a long-term earnings growth rate of 15.2%. The Zacks Consensus Estimate for TXT’s 2022 sales suggests growth of 4.1% from the prior-year reported figure.

Price Movement

In the past year, shares of Northrop Grumman have rallied 23.7% against the industry’s decline of 7.2%.

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.

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