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F-35 work boosts Northrop Grumman Aerospace Systems' revenue

Northrop Grumman’s Aerospace Systems business segment saw first quarter 2019 revenue increase 7% year-on-year to about $3.5 billion, partly due to more F-35 work.

More revenue from the E-2D Advanced Hawkeye airborne early warning and control (AEW&C) aircraft, restricted programmes (presumably including development work on the B-21 stealth bomber), and the MQ-4C Triton unmanned air vehicle (UAV) also helped the company’s sales grow.

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An F-35 centre fuselage at Northrop Grumman facility

Northrop Grumman

Across all business segments, including mission systems, innovation systems (formerly Orbital ATK) and technical services, the company’s first quarter sales increased 22% to $8.2 billion.

Northrop Grumman began full-rate production of the Lockheed Martin F-35’s centre fuselage in June 2018, though the aircraft and its subsystems touch all parts of the company’s work.

“I believe [it’s] our largest programme, in the range of 9% to 10% of sales,” says Ken Bedingfield, corporate vice-president and chief financial officer. “We do see F-35 growth that [affects] all four of the sectors.”

F-35-related growth opportunities include more centre fuselage assembly and work related to radars, cyber and intelligence systems, and air structure engineering and sustainment work, he says.

The company also received in March from the US Navy a sole-source $323 million engineering, manufacturing and development (EMD) contract for its Advanced Anti-Radiation Guided Missile-Extended Range (AARGM-ER), an air-launched weapon designed to seek and destroy ground targets.

“AARGM-ER will initially be fielded on F/A-18 Super Hornets and Growlers. It will also be the first supersonic long-range missile to be integrated on to the F-35. And it is expected to be the strike weapon of choice for both the Navy and the Air Force,” says Kathy Warden, chief executive officer of Northrop Grumman. “The President's FY2020 budget includes a request for the Air force variants of AARGM-ER and is called Stand-in Attack Weapon.”

Such a long-range weapon would likely be used to fire upon Russian or Chinese military targets that are protected by advanced anti-aircraft weapons. Likely targets would include theater ballistic missile launchers, land attack and anti-ship cruise missile launchers, GPS jammers, anti-satellite systems, and integrated air defense systems, according to the USAF’s FY2020 budget proposal.

Northrop Grumman believes the AARGM-ER will be prized by the Pentagon.

“We expect follow-on production after EMD [work] will be in the multi-billion dollar range,” says Warden.

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