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Northrop (NOC) Wins Contract for Park Air Systems Upgrade


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Defense major Northrop Grumman Corporation’s (NOC - Analyst Report) UK-based affiliate has secured a contract from its South African partner, AME Air Traffic Management (Pty) Ltd, to supply air traffic control (ATC) communication systems equipment under a nationwide upgrade drive. The terms of the contract have been kept under wraps.

Details of the Contract

The end customer of the contract is Air Traffic and Navigation Services, which offers air traffic, navigation, training and associated services in South Africa and the majority of the Southern Indian and Atlantic Oceans — nearly 10% of the world’s airspace.

The communication systems will be installed in two of South Africa’s most important airports – O.R. Tambo International Airport in Johannesburg and Cape Town International Airport. These two airports see a cumulative influx of over 27 million passengers annually. The new ATC devices will replace the Park Air systems, which were installed in 1997.

The contract covers the deployment of the Park Air T6 Radio, Park Air remote control and monitoring system, multi-access remote control server, integrated cabinets, cavity filters and controllers.

According to Northrop’s management, the company’s successful long-standing alliance with Air Traffic and Navigation Services shows not only the superior quality of its products but also unwavering customers’ trust on its services.

Recent Contracts

Northrop Grumman’s Technology Services business division has won two modification contracts with a combined value of $96.4 million from the U.S. Air Force. The contracts call for providing support to the KC-10 program. Notably, KC-10 is The Boeing Company’s (BA - Analyst Report) aerial refueling tanker aircraft. Work on both the deals is scheduled to be over by Sep 28, 2018 and they will utilize fiscal 2017 operations and maintenance funds.

The first contract, involving the delivery of 12 engine overhauls related to the KC-10 program, was valued at $54.1 million. Contract work will be carried out in Vancouver, Canada.

Under the terms of the second contract, Northrop will deliver contractor logistics support for aircraft and spares involving the KC-10 program. It has been valued at $42.3 million and work will be executed across the world. Work locations include McGuire Air Force Base (AFB), NJ; Travis AFB, CA; Hickam AFB, HI; and Tinker AFB, OK in the U.S., in addition to Yakota Air Base, Japan. (Read more: Northrop Grumman Secures Two Air Force Deals Worth $96M)

Zacks Rank & Key Picks

Northrop Grumman carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the same space include Engility Holdings, Inc. (EGL - Snapshot Report) and General Dynamics Corporation (GD - Analyst Report) .

Engility has witnessed four upward estimate revisions for the full year over the last 60 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

General Dynamics, a Zacks Rank #2 (Buy) stock, has seen three upward estimate revisions for 2016 over the last 60 days.

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