Northrop Grumman Corp.’s (NOC - Free Report) business subsidiary, Northrop Grumman Systems Corp., recently secured a contract worth $57.4 million for the production of Joint Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (JCREW) systems. The contract was awarded by Naval Sea Systems Command, Washington, DC.
Per the deal terms, Northrop will provide engineering support services to JCREW by introducing technologies and addressing diminishing material and depot repairs. Work related to the deal will be performed in San Diego, CA, and is expected to get completed by September 2020.
A Brief Note on JCREW Systems
Northrop Grumman’s JCREW is a software-programmable jammer that provides protection from device-triggered improvised explosive devices (IEDs). The units are available in both a wearable, backpack design and a mounted/fixed-site version to protect warfighters on foot, in vehicles and permanent structures. Currently, the systems are being used by both the U.S. Navy and U.S. Air Force personnel.
What Favors Northrop Grumman?
Northrop Grumman’s JCREW systems have consistently been reinforced with new technologies that help in neutralizing increasing global threats. Going forward, the North American region is expected to be the largest market for electronic warfare products. This will aid Northrop Grumman to acquire contracts related to this system. Such contract flows are expected to bolster the company’s profit margin.
Looking ahead, per a report by Markets and Markets Research, the electronic warfare systems market is expected to grow to $30.32 billion by 2022 from $24.2 billion in 2017, at a CAGR of 4.61%. Such projections indicate increased demand for electronic warfare systems and products. Being one of the premier defense giants in the United States, Northrop Grumman is expected to benefit a great deal from such projections, given the huge opportunity in this space.
Shares of the company have gained 22% in a year compared with the industry’s growth of 10.2%.
Zacks Rank & Key Picks
Northrop Grumman currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are L3Harris Technologies Inc (LHX - Free Report) , Lockheed Martin Corporation (LMT - Free Report) and Heico Corporation (HEI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
L3Harris Technologies’ long-term growth estimates currently stand at 8%. It came up with average positive earnings surprise of 4.21% in the last four quarters.
Lockheed Martin came up with average positive earnings surprise of 16.03% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 3.31% to $21.20 in the past 60 days.
Heico came up with average positive earnings surprise of 1.19% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 4.1% to $2.30 over the past 60 days.
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