Los Angeles Times
October 31, 2007 The company could get $4 billion in U.S. and foreign sales from the system it's building for the Marine Corps.
By Bloomberg News
Northrop Grumman Corp., the largest maker of radar for military aircraft, may book as much as $4 billion in sales to U.S. and allied forces from a new air-defense system being developed for the Marine Corps.
Northrop got an initial $256-million development contract for the ground/air task-oriented radar, or Gator, from the Marines in March, Mark Smith, business development director for tactical radars, said Tuesday in Linthicum, Md.
Northrop, maker of radar for U.S. fighter jets including the F-22 Raptor and F-35 Lightning II, is looking to win new orders by expanding that expertise into land- and ship-based systems. To help with that effort, Northrop in the last year spent $14 million on a new radar test facility in Linthicum for systems including Gator.
"It's all upside for us," James Pitts, president of Northrop's electronics systems, said at the facility's opening ceremony Tuesday. "We're not big in that market right now. Anything we do is either going to take market share away from one of our competitors or allow us to grow."
Gator can be mounted on or towed by Humvee transports and used by the Marines for air defense, air-traffic control and detecting the source of enemy rocket and mortar launches. It will replace five of the six radar systems now used by the service, Pitts said.
As the Gator radar goes into production, the value may grow to $1.4 billion, which would expand to as much as $2 billion if the Army and Air Force decided to buy the equipment, Smith said.
International sales to U.S. allies may add $2 billion more over 15 to 20 years, he said.
The radar is being developed by Northrop's electronics unit, the company's largest. Electronics accounted for sales of $6.58 billion last year, or 22% of Northrop's total revenue of $30.1 billion.
Northrop announced Oct. 24 that third-quarter profit grew by 62% to $489 million as sales rose 6.7% to $7.93 billion. The electronics group lifted sales less than 1% to $1.67 billion in the quarter.
New radar work is one area that will drive growth at the unit, Chief Executive Ronald Sugar said.
"There's a significant amount of future opportunity here," he said.
Northrop's shares rose 20 cents to $82.67.