Northrop Grumman Corp. (NOC - Free Report) recently clinched a foreign military sales (FMS) contract for procuring two complete battery sets of Integrated Air and Missile Defense Battle Command System (IBCS) production hardware and software. The deal was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Valued at $349.4 million, the contract is expected to be completed by Jun 30, 2026. The company will execute the work at Huntsville, AL.
Significance of IBCS
The IBCS enables warfighters to use any sensor and any weapon to achieve mission objectives in a true open architecture environment; thereby increasing battlespace and providing dramatically improved protection. The IBCS offer a fully integrated environment where soldiers trained in surveillance, identification, weapon management and engagements can collaboratively plan and execute engagements of hostile targets while operating under joint oversight and the rules of engagement.
In recent times, missile defense has a pivotal role to play in a nation’s defense strategy. IBCS is a major evolution in the software and hardware development process that continues to affirm Northrop Grumman’s leadership in providing net-centric solutions to warfighters.
Notably, Northrop Grumman pioneered the development of integrated battle command solutions and interoperable defense systems. It provides industry-leading expertise in system of systems integration, mission command, battle management, communications, fire control and integrated air and missile defense systems. Naturally, being a prominent U.S. defense contractor, the company frequently wins contracts.
In particular, Northrop Grumman’s Mission Systems unit, which develops IBCS, reported fourth-quarter 2018 revenues of $3.04 billion that moved up 2% year over year. We believe that the latest contract will allow this business unit to generate similar solid results in the upcoming quarters.
Shares of Northrop Grumman have declined about 14.9% in a year compared with the industry’s fall of 6%.
Zacks Rank & Key Picks
Northrop Grumman currently carries a Zacks Rank #3 (Hold)
A few better-ranked stocks in the same sector are The Boeing Company (BA - Free Report) , Spirit Aerosystems Holdings (SPR - Free Report) and Heico Corporation (HEI - Free Report) . While Boeing and Spirit Aerosystems sport a Zacks Rank #1 (Strong Buy), Heico carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Boeing came up with average positive earnings surprise of 15.52% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 11.3% to $20.13 in the past 90 days.
Spirit Aerosystems’ long-term growth is estimated to be 7.8%. The Zacks Consensus Estimate for 2019 earnings has risen 3.7% to $7.56 in the past 90 days.
Heico’s long-term growth is projected to be 12.1%. The Zacks Consensus Estimate for 2019 earnings has risen 7% to $2.14 in the past 90 days.
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