Have I mentioned yet how much earnings season annoys me? (Oh yes, I have.) Four times a year, we suffer this deluge of corporate earnings news, and the roar drowns out other information that, while perhaps less telling about the past, carries important news about the future. Take, for example, Northrop Grumman's
The real news
A little more than one year ago, I managed to merge the mundane with the momentous by slipping a mention of Northrop's successful test-landing of an RQ-8A Fire Scout unmanned aerial vehicle (UAV) on a moving naval vessel into a Foolish Forecast on Northrop's earnings. On Friday, Northrop marched another step down the path of transforming our military into an army of robots (in the literal rather than the usual pejorative sense). To wit, it won the six-year, $636 million Unmanned Combat Air System Carrier Demonstration (UCAS-D) contract to conduct the at-sea carrier launch and recovery of the fixed-wing X-47B UAV.
The X-47B (naval cousin to Northrop's X-47A Pegasus land-based UAV, and rival to Boeing's
Well, aside from the obvious answer -- the $636 million price tag, which Northrop gets to start collecting long before the project becomes a viable product -- the company's win here suggests that Northrop is pulling ahead in the UAV race. The way I see it, the U.S. military is transitioning from one in which humans fight on the front line to one in which we sit at a safe distance while our mechanical proxies do the dirty (and dangerous) work. As this trend plays out, Northrop is winning more and more contracts like UCAS-D and building out its family of UAV products that already includes the RQ-4 Global Hawk, the MQ-5B Hunter, and the MQ-8 Fire Scout.
Ultimately, we may wake up one day and find that Northrop has supplanted Lockheed and Boeing as the nation's foremost military aircraft maker.
Spotting trends early is our forte at Motley Fool Rule Breakers, where we've already identified another defense contractor with the wind at its back. Find out who it is when you take a free, 30-day trial to the service.
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