Northrop Grumman Corp.’s NOC business unit, Northrop Grumman Systems Corp. recently secured a contract to provide ground stations, trade studies, tooling and associated support equipment in relation to production of MQ-4C Triton unmanned aircraft. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.
Valued at $251.6 million, the contract is scheduled to be completed by February 2023. The majority of the work related to the deal will be carried out in San Diego and Palmdale, CA as well as Red Oak, TX.
Advantages of Triton UAS Air Vehicles
Northrop Grumman’s MQ-4C Triton UAS is equipped to provide real-time intelligence, surveillance and reconnaissance (ISR) over the vast ocean and coastal regions. The system is also equipped with a robust mission sensor suite that provides 360-degree coverage on all sensors, ensuring unprecedented maritime domain awareness for the U.S. Navy.
Triton UAS supports a wide range of missions including maritime ISR patrol, signals intelligence, search and rescue and communications relay. This is because Triton incorporates a reinforced airframe for increased internal payload along with de-icing and lightning protection systems, which allow the aircraft to descend and ascend in harsh maritime weather to get a closer view of ships and other targets at sea.
Northrop Grumman’s Prospects
Cost-effectiveness of UAS compared to manned aircraft and zero mortality has been bolstering demand for military drones. This, in turn, has been driving demand for Triton, a next-generation UAS.
During the 2018-2025 period, the global unmanned aerial vehicle (UAV) market is anticipated to witness CAGR of 14.5% to reach $52.3 billion (per Markets and Markets research firm). Notably, rise in the procurement of military UAVs by defense forces worldwide is one of the most significant factors, which is expected to provide a boost to the UAV market.
To date, North America remains the largest market for UAV, buoyed by increasing use of UAVs for border and maritime surveillance activities, particularly in the United States and Canada.
With Northrop Grumman being a prominent defense major in the United States and an expert UAV manufacturer, the aforementioned projections for the UAV market should boost this defense prime’s growth substantially.
Price Performance
In a year’s time, shares of Northrop Grumman have rallied about 47.1% compared with the industry’s 29.1% rise.
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Zacks Rank & Stocks to Consider
Northrop Grumman has a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space are Air Industries Group AIRI L3Harris Technology Inc LHX and Leidos Holdings, Inc. LDOS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Air Industries delivered average four-quarter earnings beat of 52.78%. Its Zacks Consensus Estimate for earnings of 5 cents for 2020 improved by 12 cents in last 60 days.
L3Harris’ long-term growth estimate currently stands at 8%. The company delivered average positive earnings surprise of 5.02% in the last four quarters.
Leidos Holdings delivered average four-quarter earnings beat of 8.93%. It currently has a solid long-term earnings growth rate of 7.5%.
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