The Insider

Govini: Northrop purchase of Orbital ATK creates long-term space vehicle play

October 24, 2017 |
Marjorie Censer
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Northrop Grumman will see near-term boosts in its missiles and munitions sales from acquiring Orbital ATK, according to a new analysis from big data and analytics firm Govini.

The analysis, set for release Wednesday, finds the deal's long-term potential is in the space vehicles market. Govini seeks to help its customers make sense of public-sector data.

"Orbital's largest contribution to Northrop's bottom line will be from munitions," the report reads. "The segment accounted for 49.1 percent of Orbital ATK's federal revenue over the last five years."

Space vehicles, the document adds, accounted for about 37 percent of Orbital ATK's federal revenue from fiscal year 2013 to FY-17, while guided missiles comprised nearly 14 percent of its sales.

Though that's a smaller piece, Govini argues the guided missiles "share will grow, especially if Northrop wins its competition with Boeing to replace the Minuteman III intercontinental ballistic missile system."

Orbital ATK averaged $2.2 billion in annual capture of unclassified contract obligations over the last five years, according to Govini's report.

"Its annual contracts were 21.9 percent higher in FY16 than in FY13, signaling a strong rebound from sequestration with growth coming from space vehicles, followed by guided missiles and then munitions," the document adds.

Matt Hummer of Govini told Inside Defense the company relies on a wide range of data, from procurement data to financial information to patent data, to conduct its analyses. Govini categorized short-term and longer-term efforts based on whether the contractor received research and development or procurement funding.

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