SPR Spirit Aerosystems Holdings Inc

Northrop Grumman Corporation (NOC) has won a modification contract, worth $59.6 million, from the U.S. Department of Defense (DoD). The company’s business unit Northrop Grumman Technical Services will be responsible for this contract.

Per the deal, Northrop Grumman will offer operation and maintenance services to the U.S. Navy’s combined tactical training ranges. These services will be required at land-based test amenities, shore locations and aboard ships in ports and at ocean.

Northrop Grumman will provide the services from its facilities in Oceana, Va., Yuma, Ariz., Fallon, Nev., Cherry Point, N.C., Key West, Fla. and San Diego, Calif. The contract is expected to be completed by Jul 2014.

It is evident from past records that Northrop Grumman gets orders from the U.S. defense establishments at regular intervals. Recently, the company managed to get a few significant contracts. In Jun 2013, Northrop Grumman received two back-to-back contracts, worth $522.3 million, from the U.S. DoD. As per the contracts, the company will offer follow-on support on interoperability of dissimilar training systems and supply spares to five E-2D Advanced Hawkeye Full Rate Production Lot 1 Aircraft. Recently, the company received another contract, worth $555.6 million, from the U.S. DoD to upgrade Global Hawk.

We know that the performance of U.S. defense majors primarily depends on the orders coming from the national and international defense establishments.

Despite the U.S. defense budget cuts due to the ongoing sequester, Northrop Grumman’s continued efforts to introduce new technological applications and improve existing processes in military and aerospace programs will enable it to get orders at regular intervals and maintain a steady revenue flow.

Northrop Grumman is slated to release its second-quarter 2013 earnings on Jul 24, 2013. The Zacks Consensus Estimate for second-quarter 2013 is currently pegged at $1.71 per share.

Northrop Grumman currently has a Zacks Rank #3 (Hold). Other stocks from the sector that are presently performing well include The Boeing Company (BA), Spirit AeroSystems Holdings, Inc. (SPR) and Hexcel Corporation (HXL). All of them carry a Zacks Rank #2 (Buy).

 
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