Northrop Grumman Corporation (NOC) has received a $109 million contract from the U.S. Air Force to produce a redesigned aft deck for the B-2 stealth bomber that will bolster the world's most survivable aircraft.
The B-2 Spirit stealth bomber is the only long-range, large-payload aircraft that can penetrate deeply into protected airspace. The warfighter is capable of flying more than 6,000 nautical miles un-refueled and more than 10,000 nautical miles with just one aerial refueling, granting it the ability to reach any point in the planet in a matter of hours. Just as the Air Force’s superior air fleet gives airspace authority and the tanker refueling fleet control over the airspace, B-2 buttresses the US against threats unleashed from anywhere in the world.
The B-2 Spirit aft deck is a metallic panel on the bomber's upper surface that protects its composite airframe from the heat of engine exhaust. It will be redesigned to give long-term reliability and affordability. The upgrade on the bomber would facilitate the aircraft to go through long-term maintenance cycles without the need for supplementary services and repairs.
The newly redesigned structure reflects Northrop Grumman's thorough thermal and structural analysis of the aft deck, and its operating environment. The work under the contract will be conducted at Northrop Grumman facilities in Palmdale, California, and St. Augustine, Florida.
Northrop Grumman offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program.
However, this is offset by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the defense budget, lower backlog, cost over-runs and reductions in Afghanistan and Iraq operations. Thus, over the near term, we do not find any near-term catalyst for the company. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
In October this year, Northrop Grumman reported third quarter 2011 adjusted earnings of $1.86 per share compared with $1.51 per share in the third quarter 2010. Northrop's earnings easily exceeded the Zacks Consensus Estimate of $1.68 for the quarter. Similarly, its peer, Lockheed Martin Corporation (LMT) showed resilience, reporting strong third quarter fiscal 2011 operating earnings of $1.99. The quarter’s results sailed past both the Zacks Consensus Estimate of $1.81 and year-ago earnings of $1.53 per share.
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