Company Watch - Northrop Grumman

AirGuide Business, April 28, 2008

Apr 28, 2008

Air Force officials recently met with top officials from Northrop Grumman and Boeing to discuss the award of a contract to build military refueling tankers. Northrop won the contract, and Boeing has protested the decision. The Government Accountability Office is expected to rule on the dispute by June 19. Apr 22, 2008

Northrop Grumman said first-quarter profits declined 32% and that its Gulf Coast shipbuilding operations hurt results. The company took a $326 million charge in the quarter. Most of the charge was related to cabling problems with a Navy amphibious assault ship. Apr 25, 2008

Northrop Grumman beat out Boeing and Lockheed Martin to win a $1.16 billion Navy contract to design and develop an unmanned aircraft for patrolling coastlines and the open ocean. Although the Broad Area Maritime Surveillance or BAMS award announced Tuesday is for the initial development of the plane, the contract could ultimately be worth several billion as the Navy buys as many as 44 unmanned aircraft. President Bush's 2008 budget request includes $2.3 billion for research, development, testing and evaluation for the program plus an additional $780 million for procurement. Apr 23, 2008

Australia also included its requirements for a surveillance aircraft as part of the Navy contest and will have to decide by the end of this year whether it wants to proceed with buying Northrop's plane, Dishman said. Northrop Grumman's Global Hawk has recorded more than 15,700 combat hours in Iraq and Afghanistan. With a wingspan of 131 feet, it can fly to a height of more than 60,000 feet for a maximum duration of as much as 36 hours. The aircraft holds the record for an unmanned flight of 33 hours, set on March 22. Powered by a single Rolls-Royce Group Plc engine, it has an average cruising speed of 310 knots. Northrop is the third-largest U.S. defense contractor, after Bethesda, Maryland-based Lockheed, and Chicago-based Boeing. Northrop fell $1.52, or 2.1 percent, to $69.56 at 4:15 p.m. in New York Stock Exchange composite trading, before the announcement. Lockheed dropped $2.78, or 2.6 percent, to $103.79, while Boeing declined 53 cents to $78.56. Apr 22, 2008

Northrop Grumman defeated Boeing for another big-dollar defense contract, winning a $3.74 billion unmanned Navy spy-plane contract, the Department of Defense said Tuesday. Northrop's Global Hawk drone, which is already being flown by the Air Force in Iraq and Afghanistan, beat out offerings by Boeing and Lockheed Martin. Analysts have predicted that winning the contract should add 10 cents per share to the Los Angeles defense contractoris earnings. The Global Hawk has logged nearly 16,000 combat hours and can fly at more than 60,000 feet from more than a day and a half. Last month, a consortium of Northrop and the European Aeronautic Defence and Space Company beat Boeing for a $40 billion contract to supply the Air Force with its next generation air tanker. Shares in Northrop closed down 2.1 percent to $69.56 Tuesday. Apr 22, 2008

Northrop Grumman's Global Hawk drone, which is already flown by the Air Force in Iraq and Afghanistan, beat Boeing and a third offer from Lockheed Martin Corp. The order is for as many as 68 aircraft, Captain Robert Dishman, the Navy's program manager, said at a briefing in the Pentagon today. The initial $1.16 billion development contract runs through September 2014. The victory extends Northrop's lead in unpiloted planes over Lockheed and Boeing, which dominate the manned military aircraft market. Northrop's $5.7 billion Global Hawk order from the Air Force is already the U.S. military's largest drone program. During the 2003 invasion of Iraq, the aircraft supplied 55 percent of the target data used to destroy air defenses, while flying only 5 percent of the surveillance missions. Apr 22, 2008

The new Northrop Grumman Navy contract may increase Los Angeles-based Northrop's earnings per share by 10 cents, or 1.4 percent, in 2011 from the $7.22 predicted without the contract, Walton said. He rates Northrop's shares ``outperform'' and doesn't own any. Prior to the announcement, Walton had predicted Northrop had ``a better than 50 percent chance'' of winning the order. The win may also lift the shares by $1, he said. The Navy's unmanned Broad Area Maritime Surveillance plane will detect and track threats to the fleet. The aircraft will operate around the clock from five bases worldwide, traveling as many as 2,000 miles and loitering for extended surveillance missions. The new drone would work with manned Navy planes such as Boeing's P-8A Poseidon, which is replacing Lockheed-built P-3 Orion aircraft used since 1962. As part of the development contract, Northrop will provide two unmanned aircraft with payloads and communication suites, two mission control systems and an integration laboratory. The Navy wants the new planes in service by 2015 and to be used at five locations by 2019, Dishman said. The Navy plans to keep the planes in service for about 20 years, he said. Apr 22, 2008