Northrop optimistic about 2015 as next-generation bomber contract looms

Northrop optimistic about 2015 as next-generation bomber contract looms

The LRSB contract would be worth up to $55 billion, and Northrop is competing with a mega-team of Lockheed Martin and Boeing for the contract.

Northrop Grumman is upbeat about its prospects for winning what would be a massive contract to build the next-generation bomber despite battling with two huge competitors.

The company posted better-than-expected 2015 profits projections as it awaits the award of the Long Range Strike-Bomber contract, which would call for 80 to 100 aircraft at $550 million per unit, according to a Bloomberg News report.

Annual earnings for the company are expected to be between $9.20 to $9.50 per share, which beat the average estimate of $9.08 by analysts. Northrop is expecting sales of $23.4 to $23.8 billion, which would be a slight drop from last year’s mark of $24 billion.

The LRSB program for the Air Force will be one of the most massive at the Pentagon, and could rescue Northrop from six quarters of dropping sales. It is the manufacturer of the B-2 bomber, the most recent bomber in the Air Force’s inventory, but it will have to go up against defense industry heavyweights Lockheed Martin and Boeing, who are teaming up for the big.

The deal, which could end up being worth $55 billion, would be far bigger than the contracts Northrop has gotten for work on unmanned aircraft and radars. The company makes the RQ-4 Global Hawk unmanned aircraft.

With an economic downturn and a budget crunch for the Pentagon, LRSB represents an opportunity for big defense contractors to still cash in.

Northrop at one point had a shipbuilding business that did work for the Navy, building vessels such as the DDG-51 destroyer and LPD-17 amphibious ship, but that division was spun off into a separate company — Huntington Ingalls Industries — so Northrop could focus on its aerospace operations.

Northrop’s most recent contract win was last month when it reached a deal with South Korea to provide them with four Global Hawks for $657 million.

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