Northrop Grumman Corporation NOC recently received a modification contract worth nearly $105.3 million from the U.S. Air Force. Per the contract, Northrop will be required to provide the necessary hardware for the year 2015 to support the Large Aircraft Infrared Countermeasures (“LAIRCM”) equipment program of the U.S. Air Force.
Following the contract win, Northrop’s shares moved up marginally by 0.1% to close at $163.38 on Apr 16.
LAIRCM system is essential and critical for the safety of onboard troops in a hostile situation. This system has advanced technology which automatically detects a missile launch, determines whether it is a threat and activates a high-intensity laser-based countermeasure system to track and defeat the missile.
Northrop’s LAIRCM system will be reinforced with new technologies to neutralize increasing threats and lower the overall handling costs of the Air Force.
The necessary work on this modification contract will be performed at Rolling Meadows, IL and is expected to be complete by Apr 29, 2017. While the majority of the hardware produced will be used by the U.S. Air Force, some equipment will also be supplied to allied nations.
Northrop Grumman has been a trusted partner of the U.S. Air Force for nearly 15 years and contract wins from the U.S. Department of Defense are a clear indication of the quality of their military products.
Besides domestic contracts, Northrop is gradually increasing its international sales. The company now expects international sales to increase to about 15% of total revenues in 2015 due to rising demand for its unmanned and manned aircraft; electronics; cyber; sustainment and other offerings.
Northrop Grumman currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the space are Huntington Ingalls Industries, Inc. HII, Air Industries Group AIRI and General Dynamics Corp. GD. Huntington Ingalls sports a Zacks Rank #1 (Strong Buy), while Air Industries Group and General Dynamics carry a Zacks Rank #2 (Buy).
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