Shares of aerospace and defense operator Northrop Grumman Corp. (NOC) moved up thanks to steady order wins from the defense establishments. The shares of Northrop ended at $113.95 on Wednesday gaining 2.3% in three days.
On Sep 27, the Department of Defense announced 20 separate contracts adding up to $334.2 million. Northrop received a cost-plus-fixed-fee contract worth $13.8 million. Per the contract, the company will provide logistic support for the MQ-8B/C Fire Scout robotic helicopter through Nov 2014.
Other aerospace and defense operators to win contracts on the day were The Boeing company (BA) with $15.5 million, Rockwell Collins (COL) with $10.8 million and General Dynamics Corp. (GD) with a $7 million contract.
On Nov 25, Northrop was selected by The Royal Thai Air Force to supply additional AN/TPS-78 air defense and surveillance radar systems. The company will start supplying the equipment in 2015 and also provide training, spares and logistics support.
On Nov 26, Northrop along with the U.S. Army successfully demonstrated a warfighter-focused, net-centric battle command system for integrated air and missile defense. This new command battle system will integrate all defense components and provide an edge to its operators in a war zone. These systems will ensure future revenues for the company.
Northrop’s diverse product offerings ensure a steady flow of orders not only from the U.S. but also from foreign shores. In fact, the threat of U.S. defense budget cuts has prompted the company to look for other markets. We believe stepped up defense spending in the Middle East and other Asian countries will keep their revenue stream alive.
Northrop currently holds a Zacks Rank #2 (Buy).
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