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Northrop Wins $54M Navy Deal to Support E-2D AHE Program

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Northrop Grumman Corp.’s (NOC - Free Report) business unit, Aerospace Systems, recently won a $54.4-million contract to provide maintenance and recurring support for equipment related to the E-2D Advanced Hawkeye (AHE) aircraft. The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.

Northrop’s Aerospace Systems will also offer non-recurring engineering and integrated logistics support activities for the E-2D aircraft. Work related to the deal will be executed in Melbourne, FL, and is expected to get completed by December 2022.

Hawkeye Aircraft’s Attributes

Hawkeye is an airborne, all-weather, tactical, early-warning aircraft used by the U.S. Navy. E-2D is the fourth version of the E-2 Hawkeye. Notably, the E-2D Advanced Hawkeye has a structurally distinctive design — a rotating rotodome and four vertical stabilizer tail configurations — that provides 360-degree surveillance at all times. These technologies increase this aircraft’s visibility on faraway targets.

Northrop Grumman is supported by other industry leaders inthis program. Lockheed Martin’s (LMT - Free Report) unit supplies the principal AN/APY-9 radar system for the Hawkeye. L-3 Technologies’ (LHX - Free Report) unit supplies the ultra-high frequency, electronically-scanned array antenna. Meanwhile, Raytheon Technologies’ (RTX - Free Report) Space and Airborne Systems provides the T-56-A engines. Such support from other prominent defense majors makes the Hawkeye aircraft program even more attractive.

What Favors Northrop Grumman?

In the backdrop of the heightening geopolitical uncertainties around the world, several developing countries have significantly increased their defense spending. The increase in defense spending can also be attributed to advancements and integration of new tactical and logistical features, equipment and other services. The worldwide popularity of the E-2D Advanced Hawkeye aircraft continues to soar, which is currently deployed by the military forces of Egypt, France, Israel, Japan and other nations.

Notably, in order to increase the popularity of the Hawkeye aircraft program and keep acquiring regular contracts, Northrop Grumman has been making efforts in consistently keeping its aircraft upgraded. The latest contract awarded by the company is a testament to that.

Looking ahead, the U.S. fiscal 2021 defense budget proposal provisions for investments worth $56.9 billion on military aircraft. Such budgetary developments will benefit Northrop Grumman in the upcoming period, in the form of contract acquisitions related to its E-2D Advanced Hawkeye and other aircraft programs.

Price Performance and Zacks Rank

Shares of this Zacks Rank #3 (Hold) company have lost 5% in the past twelve months compared with the industry’s decline of 28.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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