Northrop Grumman Corporation (NOC) has been selected by the U.S. Air Force for a delivery order for the B-1 Bomber aircraft mission planning capability related to the Joint Mission Planning System (JMPS) platform. The JMPS is a family of scalable, extensible and configurable tools and decision aids that automate planning for sensor, weapon or aircraft missions. Northrop Grumman’s delivery order has a potential value of $26 million, if all options are exercised.
The B-1 Bomber aircraft is a four-engine, variable-sweep wing strategic bomber originally developed by the erstwhile conglomerate Rockwell International whose successor is Rockwell Collins Inc. (COL). In 1996 however the defense and aerospace business supervising the B-1 Bomber aircraft was sold to The Boeing Company (BA).
Northrop Grumman will develop, maintain and integrate planning components unique to B-1 Bomber missions into JMPS and integrate with other mission planning environment components necessary for the capability. The delivery order was awarded under the Mission Planning Enterprise Contract II by the Electronic Systems Center, Hanscom Air Force Base at Massachusetts.
Northrop Grumman’s total order backlog at the end of fiscal 2010 stood at $64.2 billion compared with $69.2 billion at fiscal-end 2009. The company expects its revenue for fiscal 2011 to about $27.5 billion and earnings per share (EPS) to be in the range of $6.40–$6.60. The Zacks Consensus Estimates for the first quarter 2011, fiscal year 2011 and fiscal year 2012 currently stand at $1.67 per share, $7.07 per share and $7.53 per share, respectively.
Los Angeles-based Northrop Grumman Corporation is one of the world’s leading shipbuilders and the second largest defense contractor in the U.S. The company supplies a broad array of products and services to the U.S. Department of Defense (DoD), including electronic systems, information technology, submarines and surface ships, aircraft, space technology and systems integration services.
We believe that Northrop Grumman is fundamentally a sound company and has a strong market position, but we are cautious about near-term bumps. Northrop’s product line is well positioned in high priority categories, such as defense electronics, next-generation ships, unmanned aircraft and missile defense.
Revenue and earnings growth continues to be driven by its strong presence in the cyber security, intelligence, surveillance and reconnaissance market.
However, we believe all the above positives have already been taken into account. Currently the stock is moving laterally due to the absence of any positive cues. We believe the trend would continue in the near term and thus retain a short-term (1 to 3 months) Zacks #3 Rank (Hold) on the stock. We are also maintaining our long-term Neutral recommendation on the stock.
BOEING CO (BA): Free Stock Analysis Report
ROCKWELL COLLIN (COL): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
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