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Northrop to Build 3rd ATMS for Joint Polar Satellite System

Northrop Grumman Corp. (NOC) received a contract from the National Aeronautics and Space Administration (:NASA) for building the third Advanced Technology Microwave Sounder (:ATMS) for the National Oceanic and Atmospheric Administration's (:NOAA) Joint Polar Satellite System (:JPSS). The contract is worth $121 million.

Per the contract, the defense major will build, check and supply the ATMS device. Additionally the company will support instrument integration on the JPSS-2 spacecraft, and provide launch and post-launch support.

This third ATMS unit is scheduled to be launched on the second JPSS satellite in 2021. The second unit is slated for delivery in the spring of 2015 for the first JPSS satellite that will be launched in 2017.

ATMS, a cross-track scanner with 22 channels, provides decisive atmospheric temperature and moisture summaries to support weather forecasting. This instrument operates in the frequency band of 23.8 GHz to 183.3 GHz.

NOAA is responsible for the funding of JPSS while NASA is accountable for developing and building JPSS instruments and spacecraft. NOAA is also responsible for operating the satellites and instruments after launch.

Northrop is a leading U.S. defense contractor competing with other defense players like Lockheed Martin Corp. (LMT), The Boeing Co. (BA) and General Dynamics Corp. (GD). Northrop’s product line is well positioned in high-priority categories, such as, defense electronics, unmanned aircraft and missile defense. Revenue and earnings growth continue to be driven by its strong presence in the current focus areas of cyber security, modernization of defense and homeland security assets, intelligence, surveillance and reconnaissance (ISR) systems, advanced electronics and software development.

It is the company’s constant endeavor to focus on its expertise and thereby enhance its technological competence. Despite a drop in third quarter revenues, the company reported higher-than-expected earnings and increased its full year earnings outlook. The threat of sequestration still looms large over the company, adversely impacting its top line.

Northrop currently holds a Zacks Rank #3 (Hold).

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