Back to top

Northrop's (NOC) Unit Wins Navy Deal to Support LAIRCM

Read MoreHide Full Article

Defense prime Northrop Grumman Corporation’s (NOC - Free Report) business unit, Northrop Grumman Systems Corp., secured a contract for procuring 2103 signal processors, seven Large Aircraft Infrared Countermeasures (LAIRCM), Signal Processor Replacement (LSPR) assemblies and more than 1 million advanced threat warning (ATW) sensors. Work for the deal is scheduled to be over by Apr 2019.

Details of the Deal

Valued at $21.2 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Per the terms of agreement, the company will also supply seven smart connector assemblies for LSPR to support the LAIRCM program.

Majority of the work will be carried out in Rolling, Meadows, IL and Goleta, CA; while the rest will be executed at various other locations within as well as outside the United States. The company will utilize fiscal 2017 aircraft procurement; research, development, test and evaluation; as well as other defense agency funds to complete the task.

A Brief Note on LAIRCM

The LAIRCM system provides safety to onboard troops in a hostile situation. It is an active countermeasure that can automatically detect a missile launch. On identifying a missile, LAIRCM activates a high-intensity, laser-based countermeasure system to track and destroy the missile automatically. The primary purpose of the LAIRCM program is to protect large aircraft from man-portable missiles.

Northrop Grumman’s LAIRCM system will be reinforced with new technologies to neutralize increasing threats and lower the overall handling costs for the U.S. Department of Defense.

Our View

Of late, terrorist groups have been increasingly using cheap yet deadly man-portable missiles. Thus, an effective anti-missile solution for the protection against such threats is the need of the hour. A well-equipped nation like the United States thus will always want to remain prepared for any sudden attacks.

Moreover, over the past few months, repeated missile threats from North Korea have forced the United States to ramp up its focus toward its missile defense space. Undoubtedly, this has led the Trump administration to multiply its arsenal treasury, both in terms of attacking missiles as well as accumulating protective measures like LAIRCM.

Currently, Northrop Grumman’s AN/AAQ-24(V) Directional Infrared Countermeasure (DIRCM) system is the only DIRCM system in production that protects an aircraft from infrared-guided missiles. LAIRCM is one variant of such a DIRCM. Considering the present situation in the nation and Northrop’s combat-proven LAIRCM, more contracts like the recent one can be expected to boost Northrop’s sales.

Moreover, the latest Senate approval for the $700 billion National Defense Authorization Act indicates significant inflow of contracts for the front-row defense stocks in the United States. Therefore, the time is ripe for adding defense majors likeNorthrop, Lockheed Martin Corporation (LMT - Free Report) , Raytheon Company (RTN - Free Report) and The Boeing Company (BA - Free Report) , in your watchlist.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

More from Zacks Analyst Blog

You May Like