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Northrop (NOC) Wins $265M Deal to Aid the G/ATOR Program
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Northrop Grumman Corp.’s (NOC - Free Report) business unit, Northrop Grumman Systems Corp., recently clinched a modification contract involving the Ground/Air Task Oriented Radar (G/ATOR) program. The award has been offered by the Marine Corps Systems Command, Quantico, VA.
Details of the Deal
Valued at $265 million, the contract is expected to be completed by Sep 28, 2025. The total cumulative ceiling of the contract is $514 million.
The latest modification entails Northrop to provide sustaining engineering and logistics support services for the G/ATOR program. These services will be offered for the retrofit of six fielded Gallium Arsenide G/ATOR Low-Rate Initial Production systems with Gallium Nitride technology, operational spares buy, software development and 5G America’s Mid-band Initiative Spectrum accommodation.
Radars & Northrop
With the rapid escalation of geopolitical tensions globally in recent times, developed and developing nations have been boosting their defense arsenal significantly. Radars constitute a vital part of their defense equipment.
Of late, the demand for military radar systems has expanded manifold, driven by factors like an increase in the defense spending of emerging economies and a rise in regional tensions and inter-country conflicts that have boosted threats from missiles and aircraft. The escalated demand has been benefiting radar manufacturing companies like Northrop in the form of contract wins, like the latest one.
Northrop’s radar solutions provide total surveillance for air and missile defense as well as air traffic control. Its diverse product portfolio includes a handful of radars like the F-35 fire control radar and Distributed Aperture System, the LONGBOW Fire Control Radar, the Scalable Agile Beam Radar, APR-39 DV(2) and EV(2) Radar Warning Receiver programs and a few more.
As far as its G/ATOR program is concerned, it enjoys solid demand in the military radar space. As of June 2023, the U.S. Marine Corps has been granted funding from Congress for eight additional G/ATOR systems. This should usher in more contracts for Northrop, like the latest one, which should boost its future revenues.
Growth Prospects
Per the Fortune Business Insights firm, the global military radar market is expected to reach $22.1 billion by 2028 at a CAGR of 6.3% from 2021. Such growth projections should benefit Northrop and other prominent radar manufacturers like RTX Corp. (RTX - Free Report) , Lockheed Martin (LMT - Free Report) and L3Harris Technologies (LHX - Free Report) .
RTX’s product portfolio consists of varied radars like integrated air and missile defense radars, ballistic missile radars, surveillance radars and air dominance radars. Radars like AN-SPY 6, AN-TPY-2, APG-79 and APG-82 are some of its combat-proven products that enjoy solid demand in the global military radar market.
RTX boasts a long-term earnings growth rate of 9.4%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 10.5% from the 2022 reported figure.
Lockheed Martin’s radars are designed with the highest degree of commonality and fully integrated systems. These can operate in all environments and are available in highly mobile configurations and deployed worldwide. Its portfolio of radars includes the AN/APY-9 radar, the IRST21 Sensos system, AN/TPQ-53 radar systems, SPY-7, the long-range discrimination radar and a few more.
LMT boasts a long-term earnings growth rate of 8.6%. The stock has a four-quarter average earnings surprise of 4.35%.
L3Harris manufactures a handful of combat-proven radars like the SPS-48, land-based surveillance radars, the AN/APY-11 Multimode radar, the Tactical Air Surveillance radar, the AN/SPS-48G Long-range 3D surveillance radar and many more.
L3 Harris boasts a long-term earnings growth rate of 2.6%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 3.7% from the 2022 reported figure.
Price Performance
In the past six months, Northrop shares have risen 6.9% against the industry’s 3.6% decline.
Image: Bigstock
Northrop (NOC) Wins $265M Deal to Aid the G/ATOR Program
Northrop Grumman Corp.’s (NOC - Free Report) business unit, Northrop Grumman Systems Corp., recently clinched a modification contract involving the Ground/Air Task Oriented Radar (G/ATOR) program. The award has been offered by the Marine Corps Systems Command, Quantico, VA.
Details of the Deal
Valued at $265 million, the contract is expected to be completed by Sep 28, 2025. The total cumulative ceiling of the contract is $514 million.
The latest modification entails Northrop to provide sustaining engineering and logistics support services for the G/ATOR program. These services will be offered for the retrofit of six fielded Gallium Arsenide G/ATOR Low-Rate Initial Production systems with Gallium Nitride technology, operational spares buy, software development and 5G America’s Mid-band Initiative Spectrum accommodation.
Radars & Northrop
With the rapid escalation of geopolitical tensions globally in recent times, developed and developing nations have been boosting their defense arsenal significantly. Radars constitute a vital part of their defense equipment.
Of late, the demand for military radar systems has expanded manifold, driven by factors like an increase in the defense spending of emerging economies and a rise in regional tensions and inter-country conflicts that have boosted threats from missiles and aircraft. The escalated demand has been benefiting radar manufacturing companies like Northrop in the form of contract wins, like the latest one.
Northrop’s radar solutions provide total surveillance for air and missile defense as well as air traffic control. Its diverse product portfolio includes a handful of radars like the F-35 fire control radar and Distributed Aperture System, the LONGBOW Fire Control Radar, the Scalable Agile Beam Radar, APR-39 DV(2) and EV(2) Radar Warning Receiver programs and a few more.
As far as its G/ATOR program is concerned, it enjoys solid demand in the military radar space. As of June 2023, the U.S. Marine Corps has been granted funding from Congress for eight additional G/ATOR systems. This should usher in more contracts for Northrop, like the latest one, which should boost its future revenues.
Growth Prospects
Per the Fortune Business Insights firm, the global military radar market is expected to reach $22.1 billion by 2028 at a CAGR of 6.3% from 2021. Such growth projections should benefit Northrop and other prominent radar manufacturers like RTX Corp. (RTX - Free Report) , Lockheed Martin (LMT - Free Report) and L3Harris Technologies (LHX - Free Report) .
RTX’s product portfolio consists of varied radars like integrated air and missile defense radars, ballistic missile radars, surveillance radars and air dominance radars. Radars like AN-SPY 6, AN-TPY-2, APG-79 and APG-82 are some of its combat-proven products that enjoy solid demand in the global military radar market.
RTX boasts a long-term earnings growth rate of 9.4%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 10.5% from the 2022 reported figure.
Lockheed Martin’s radars are designed with the highest degree of commonality and fully integrated systems. These can operate in all environments and are available in highly mobile configurations and deployed worldwide. Its portfolio of radars includes the AN/APY-9 radar, the IRST21 Sensos system, AN/TPQ-53 radar systems, SPY-7, the long-range discrimination radar and a few more.
LMT boasts a long-term earnings growth rate of 8.6%. The stock has a four-quarter average earnings surprise of 4.35%.
L3Harris manufactures a handful of combat-proven radars like the SPS-48, land-based surveillance radars, the AN/APY-11 Multimode radar, the Tactical Air Surveillance radar, the AN/SPS-48G Long-range 3D surveillance radar and many more.
L3 Harris boasts a long-term earnings growth rate of 2.6%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 3.7% from the 2022 reported figure.
Price Performance
In the past six months, Northrop shares have risen 6.9% against the industry’s 3.6% decline.
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.