Yahoo Finance Northrop (NOC) Wins $245M Contract to Aid SEWIP Block 3 Systems
Northrop Grumman Corp.’s NOC business unit, Northrop Grumman Systems Corp., recently clinched a modification contract involving the Surface Electronic Warfare Improvement Program (“SEWIP”) Block 3 Systems. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $244.7 million, the contract is projected to be completed by April 2027. The latest modification allows Northrop to exercise an option for the production of SEWIP Block 3 electronic attack hemisphere systems and ancillary hardware equipment.
A major portion of the work related to this deal will be carried out in Baltimore, MD.
What’s Favoring Northrop?
The rising threat of missile attacks across the globe has been fueling the demand for an effective electronic attack (EA) system that excels in defeating inbound threats.
In this context, it is imperative to mention that Northrop’s SEWIP Block 3 system is one such EA system that protects surface ships from anti-ship missiles, providing early detection, signal analysis and threat warning. It is the third in a series of incremental upgrades that adds an EA capability to the AN/SLQ-32 electronic warfare (EW) system to defend ships against anti-ship missiles.
Such advantages of the electronic warfare system make it an attractive option for the military, thereby resulting in NOC winning orders for the same, like the latest one. These developments are likely to boost the company’s revenue-generation prospects from the SEWIP electronic warfare system.
Growth Prospects
Countries globally have been reinforcing their military resources due to intense geopolitical tensions and amplified terrorist threats. As a result, an effective electronic warfare system with anti-missile solution features is likely to witness a pent-up demand.
This must have prompted the Markets and Markets firm to project a CAGR of 12.5% during 2023-2028 for the global electronic warfare system market. Such growth prospects may benefit Northrop as its SEWIP Block 3 product already has an established position in the electronic warfare system market.
Impressively, Northrop has provided Naval Airborne Electronic Warfare solutions for more than 55 years and is the Airborne Electronic Attack System Integrator for the U.S. Navy warfighter. From building, maintaining and upgrading electronic sensing systems for the Northrop Grumman EA-6B Prowler and Boeing EA-18G Growler electronic combat aircraft to producing radar warning receivers and electronic support measures for other platforms like the Boeing P-8A Poseidon, Northrop continues to be the leader in design, development and delivery of end-to-end electronic maneuver warfare solutions to the U.S. Navy.
Opportunities for Peers
The abounding growth prospects of the global electronic warfare system market should also benefit other defense majors who have a strong presence in this space. These companies have been discussed below:
Lockheed Martin LMT: Its Advanced Off-Board Electronic Warfare (AOEW) program delivers persistent electronic surveillance and attack capability against naval threats like anti-ship missiles (ASM). Its AOEW Active Mission Payload AN/ALQ-248 system is a self-contained electronic warfare pod hosted by the MH-60R or MH-60S Seahawk helicopter, which provides the Navy with advanced ASM detection and response capabilities.
LMT’s long-term earnings growth rate is 4.1%. Its shares have risen 3.4% in the past year.
L3Harris Technologies LHX: The company has been providing EA solutions for the past 60 years. Notably, its Viper Shield all-digital electronic warfare suite provides a virtual electronic shield around the F-16 aircraft, enabling warfighters to complete missions safely in increasingly complex battlespace scenarios.
LHX’s long-term earnings growth rate is 3%. Its shares have surged 16% in the past year.
General Dynamics GD: The company has been performing as the Lead Systems Integrator for SEWIP Block 1. Its SEWIP, a spiral-block development program, provides an immediate improvement for the legacy surface ship electronic warfare detection and countermeasure system, the AN/SLQ-32.
The company boasts a long-term earnings growth rate of 12%. Its shares have risen 39.2% in the past year.
Price Movement
Shares of Northrop have lost 4.9% in the past year compared with the industry’s 11.8% decline.
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Zacks Rank
Northrop currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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