Yahoo Finance Northrop (NOC) Wins Contract to Aid SEWIP Block 3 Systems
Northrop Grumman Corp. NOC recently secured a modification contract involving 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 $15.8 million, the contract is expected to be completed by August 2024. The deal offers an option to Northrop for providing design agent engineering of SEWIP Block 3 systems.
Majority of the work related to this deal will be carried out in Baltimore, MD.
Importance of SEWIP Block 3
The rising threat of missile attacks has been fueling the demand for an effective electronic attack system that excels in defeating inbound threats.
In this context, it is imperative to mention that Northrop’s SEWIP enjoys significant demand for its features that protect surface ships from anti-ship missiles, providing early detection, signal analysis and threat warning. NOC’s SEWIP is an upgrade to the legacy AN/SLQ-32 system, and provides game-changing capability for non-kinetic electronic attack options to the U.S. fleet.
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.
Per a report from the Markets and Markets firm, the global electronic warfare system market is projected to witness a CAGR of 4.7% during 2022-2027. Such growth prospects may benefit Northrop as its SEWIP Block 3 product already has an established position in the electronic warfare system market.
The abounding growth prospects should also benefit other defense majors who have forayed into the laser-based countermeasure system like Lockheed Martin LMT, L3Harris Technologies LHX and General Dynamics GD .
Lockheed Martin’s Advanced Off-Board Electronic Warfare (AOEW) program delivers persistent electronic surveillance and attack capability against naval threats like anti-ship missile (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 6.5%. It delivered an average four-quarter earnings surprise of 5.04%.
L3Harris’ Viper Shield all-digital electronic warfare suite is custom designed to be a baseline on advanced F-16 Block 70/72 aircraft and maximize their survivability and mission success. Some other products of the company are AN/ALQ-161A, AN / ALQ-211 CV-22, NH 90, F-16 self-protection system, AN / ALQ-214 (IDECM) F/A-18 countermeasure system, etc.
LHX’s long-term earnings growth rate is 3%. The Zacks Consensus Estimate for the company’s 2023 sales indicates an improvement of 7.9% from the prior-year reported figure.
Since many years, General Dynamics 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 8.9%. The Zacks Consensus Estimate for GD’s 2023 sales indicates an improvement of 7.3% from the prior-year reported figure.
Price Movement
In the past year, shares of Northrop have lost 12.6% compared with the industry’s 8.9% 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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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
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