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Northrop Grumman Wins $93M Navy Contract to Support C2PC

Northrop Grumman Systems Corp. NOC announced that it has been awarded a contract worth $93 million ceiling value from the Marine Corps System Command, Quantico, VA.

Per the terms, the company needs to provide software maintenance, technical and software development support toward the Command and Control Personal Computer (C2PC) and the Tactical Service Oriented Architecture (TSOA) system.

Work related to the deal will be carried out at San Diego, CA and is expected to be completed by Dec 30, 2017. If all the ordering periods are exercised, it can witness an extension up to four and a half years ending Dec 2021. The contract will utilize fiscal 2017 operations and maintenance funds (Marine Corps) to execution of the operations.

About C2PC and TSOA

Command and Control Personal Computer (C2PC) is a Windows-based client software application that helps in sharing and editing the Common Operational Picture (COP) over multiple workstations and among multiple agencies. Northrop’s C2PC displays the COP from a Global Command and Control System (GCCS) based server or transfer tactical data from other C2PC workstations. It is used to serve the U.S. Marine Corps.

Tactical Service Orientated Architecture (TSOA) allows sharing of mission-critical information on demand. The initiative provides common, open architecture for command and control applications across the Marine Air-Ground Task Force Command.

In the era of advanced technology, C2PC and TSOA offer efficient and enhanced support to military operations.

Our View

We believe that Northrop has significant upside potential, based on the U.S. government’s heightened focus on Intelligence Surveillance Reconnaissance (ISR), unmanned systems, force protection, cyber security, and missile defense.

Meanwhile, the fiscal 2017 budget reflected an annual increase of approximately $2.2 billion over the fiscal 2016 budget. The increased spending would be allocated to certain key areas that can unlock significantly higher opportunities for Northrop Grumman.

In fact, Trump’s presidency seems to have created a win-win situation for the Aerospace and Defense big shots like Lockheed Martin Corp. LMT, The Boeing Co. BA and Huntington Ingalls Industries, Inc. HII. The stocks of these companies saw significant rise after Trump presented his “America First” budget. An increase in the flow of funds from the Pentagon also added to the optimism. We expect these factors to enable Northrop to win more such scrumptious orders ahead.

Price Movement

Shares of Northrop Grumman’s have gained 9.1% in the last three months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 7.5%.

This outperformance might have been driven by the company’s product innovation and focus on strengthening its Intelligence, Surveillance, and Reconnaissance (ISR) wing.

Zacks Rank

Northrop Grumman currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Northrop Grumman Corporation (NOC): Free Stock Analysis Report
 
Boeing Company (The) (BA): Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT): Free Stock Analysis Report
 
Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report
 
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