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Tag: Northrop Grumman Corp

  • Morgan Stanley says buying these quality defensive stocks is the best option for investors right now

    Morgan Stanley says buying these quality defensive stocks is the best option for investors right now

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  • Somali pirates are back on the attack at a level not seen in years, adding to global shipping threats

    Somali pirates are back on the attack at a level not seen in years, adding to global shipping threats

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    PUNTLAND, SOMALIA – JANUARY 29: Puntland Maritime Police Forces (PMPF) are patrolling against the recently increasing pirate attacks off the coast in Puntland, Somalia on January 29, 2024. (Photo by Abuukar Mohamed Muhidin/Anadolu via Getty Images)

    Anadolu | Anadolu | Getty Images

    Somali pirates are back on the attack, with piracy around the Horn of Africa rising sharply in recent months and adding to concerns for shipping vessels, government forces and private security already locked in a battle in the Red Sea with Houthi rebels.

    Over the past three months, there has been more piracy in the Horn of Africa region than at any point in the last six years, according to Royal United Services Institute (RUSI), an independent think tank, with high ransoms for seafarers or vessels, and robbing of ship passengers by pirates.

    Piracy off the coast of Somalia had been on the decline in recent years after peaking in 2011 when Somali pirates launched 212 attacks. The United Nations Security Council (UNSC) passed seven resolutions targeting Somalia piracy between December 2010 and March 2022, permitting foreign naval and air forces to enter and patrol Somali waters and authorizing the European Union Naval Force Operation Atalanta, working with a U.S.-led task force, to use “all necessary means to repress piracy and armed robbery at sea.” 

    The cost of piracy to the global economy is a steep one. A 2013 World Bank study, still widelt cited today, estimated that piracy cost the global economy around $18 billion annually.

    According to the UNSC, the anti-piracy measures in place to enforce the freedom of navigation off the coast of Somalia expired quietly after its last renewal for three months after December 3, 2021.

    Since last November, merchant vessels have been the target of about 20% of Somali piracy-related incidents, according to Dan Mueller, lead analyst for the Middle Eastern Region for maritime security firm Ambrey. On December 14, The International Chamber of Shipping reported the hijacking of a Handymax bulk carrier, the first successful hijacking of a vessel off the coast of Somalia since 2017. The pirates have also been attacking fishing vessels, mostly Iranian, as well as many other small boats such as skiffs.

    Ocean piracy is rising across the world

    Data from 2023 shows that by many key measures, piracy is on the rise in key global shipping lanes.

    There were 120 incidents of maritime piracy and armed robbery against ships reported in 2023, compared to 115 in 2022, according to the annual Piracy and Armed Robbery Report of the ICC International Maritime Bureau (IMB). The IMB also found increased threats to crew safety, with the number of crews taken hostage rising from 41 to 73 in 2023, and crews kidnapped from two to 14.

    A spokesperson for the International Maritime Organization (IMO) which represents the seafarer spokesperson stressed to CNBC in an email, “The entire world depends on international shipping and seafarers, and therefore ships and cargoes should not be the subject of any type of attacks. The safety of seafarers are paramount – they are innocent victims who are simply doing their jobs in very harsh conditions.”

    The UNSC did not respond to CNBC’s request for comment about reinstating anti-piracy resolutions related to Somalia.

    The IMO said it is working very closely with countries in the region through the Djibouti Code of Conduct to address piracy and avoid any escalation, through capacity-building, national legislation, information sharing and regional coordination.

     “We are also looking the possibility of updating the IMO guidance on piracy to take into account new threats and technologies that can affect the safety of seafarers,” said a spokesperson.

    A 2010 photo of an armed Somali pirate keeping vigil on the coastline at Hobyo, northeastern Somalia, while the Greek cargo ship, MV Filitsa is anchored just off the shores of Hobyo where it was held by pirates after beimng captured some 513 nautical miles northeast of the Seychelles as it was sailing from Kuwait to Durban in South Africa loaded with fertilizer. 

    Mohamed Dahir | Afp | Getty Images

    According to maritime security firm Dryad Global, shipping from the coast of the Horn of Africa to the coast of India is considered a “high risk zone.” There are 25 countries in the region with their naval forces, but given the size of the area, the numbers are not a sufficient guarantee of safe navigation.

    A slight increase in piracy has also been recorded in the Gulf of Guinea on Africa’s West Coast, where 22 piracy incidents were recorded in 2023, compared to 19 in 2022, 35 in 2021, and 81 in 2020. According to the IMB, these waters accounted for three of the four globally reported hijackings, all 14 crew kidnappings, and 75% of reported crew hostages and two injured crew in 2023.

    The Singapore Straits are another area of concern due to the high number of incidents in the region. While the IMB considers these incidents low-level opportunistic crimes, 95% of the reported incidents were successful.

    “Crew continue to be harmed with nine taken hostage and two threatened. Guns were reported in three recorded incidents and knives in 15,” the IMB report noted.

    Maritime security efforts

    To help deter piracy and enhance maritime security, vessels deploy what’s called Best Management Practice (BMP) 5 when operating in the Red Sea, Gulf of Aden, Indian Ocean, and Arabian Sea.

    “Private armed security teams have proven effective alongside BMP 5 measures,” Mueller said. “An adequate citadel has proven vital to enable the crew to remain safe until military responses can be coordinated.”

    Citadels are a pre-determined fortified area on a vessel built to resist pirates from gaining entry for a period of time to protect a crew.

    Dozens of companies in the maritime security space could see an increase in their business as the threats against commercial shipping widen. The size of the maritime safety market has grown to keep up with the flow of trade and will grow from $19.85 billion in 2023 to $21.18 billion in 2024, according to ResearchAndMarkets.com, and is forecast to reach $25.93 billion in 2028 at a compound annual growth rate of 5.2%. The list of major companies operating in the market of maritime safety systems includes several niche players as well as major industrials and defense contractors, such as Raytheon, Honeywell International, Elbit Systems Ltd., L3Harris Technologies, Lockheed Martin, and General Dynamics Corporation.

    Mueller said the Indian Navy and Coast Guard along with the EU Operation Atalanta and national counter-piracy missions are active in the region where Somali pirates have attacked.

    “Indian forces have successfully operated against PAGs [pirate action group] in four boarding incidents,” he said.

    U.S. and allied defense

    On February 1, the Biden Administration approved a $3.99 billion sale of drones and military equipment to India to be used to augment its maritime safety and surveillance. Included in the sale, according to the State Department: 31 Sky Guardian drones, 310 small-diameter bombs, 170 Hellfire missiles, and other related support equipment.

    A spokesperson for the Atalanta anti-piracy effort based out of the Rota Naval Base, Spain, told CNBC via email that the coalition of maritime forces protecting against pirates around the Horn of Africa will be enhanced.

    “In a week’s time, we will have additional ships and forces deployed to the area. We will do our utmost to continue fulfilling our missions, which include the fight against piracy and the protection of Word Food Programme vessels and all vulnerable vessels in our Area of Operations against these criminal networks,” the spokesperson wrote. “We will continue to work together with our international partners to maintain maritime security.”

    Atalanta includes permanent flagship vessel ESPS VICTORIA and at certain periods of time, numerous other vessels to support the operation. EUNAVFOR currently has four more ships offering support: ITS Martinengo, FS Alsace, FS Languedoc, and ITS Duilio. The spokesperson said EU member state support allows the operation to increase the number of assets very quickly, if necessary.

    In response to a question from CNBC about expanding Red Sea security coverage to the Somali Coast, a U.S. Navy spokesperson wrote, “To protect operational security and the safety of our service members, we do not discuss or forecast future operations or postures.”

    “What we can tell you is that Operation Prosperity Guardian (OPG) is working with participating countries to utilize increased patrols in the Red Sea to offer reassurance to the shipping industry and protect maritime traffic,” the Navy spokesperson said.

    In the Red Sea, the U.S. Navy is working with allies to increase efforts to prevent Houthi rebel attacks, which are continuing despite multiple U.S. airstrikes against Houthi targets. Much merchant vessel traffic is now taking the longer transit around the Cape of Good Hope instead of transiting the Red Sea. French ocean carrier CMA CGM is among firms to fully halt its Red Sea transits, according to a person familiar with the matter. It joins shipping giants MSC, Maersk, Hapag Lloyd and others who have earlier announced they were diverting away from the Red Sea. According to Kuehne + Nagel data, almost 100% of the former Red Sea traffic has been rerouted around the Cape of Good Hope.  

    The Houthis most recent attacks on commercial vessels in the Red Sea this week were against a commercial container vessel and a U.S.-owned bulker vessel carrying U.S. cargo. The Houthis have attacked commercial shipping a total of 39 times.

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  • This new nuclear stealth bomber was top secret. So why is the B-21 Raider flying over Palmdale?

    This new nuclear stealth bomber was top secret. So why is the B-21 Raider flying over Palmdale?

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    After years of secrecy, the B-21 Raider emerged from its Palmdale hangar Friday morning and took its first flight, soaring through the sky and giving plane enthusiasts, contractor employees and the public its first glimpse of the futuristic-looking bomber in air.

    The B-21 bomber, which is being built by Northrop Grumman Corp., took off from the secretive Air Force Plant 42 in Palmdale before heading north toward Edwards Air Force Base, said Matt Hartman, a photographer who was out in Palmdale in hopes of taking photos of the plane after he’d heard rumors that a flight might be imminent.

    About 80 people crowded near the Palmdale Regional Airport to try to see the first flight with their own eyes. Once the bomber flew by, “you could hear a pin drop,” Hartman said.

    The U.S. Air Force confirmed that the B-21 is in flight testing, and called it a “critical step” in the bomber’s test program. Flight testing includes not just flying operations but also ground and taxiing tests. Edwards Air Force Base is in charge of testing and evaluation for the B-21.

    The flight test program “moves us another step closer to reaching operational capability,” Northrop Grumman said in a statement Friday. In December, Northrop Grumman unveiled the B-21 bomber for the first time, although that reveal only showcased the front of the aircraft. Technical details of the plane have so far been highly classified.

    The Air Force plans to buy at least 100 B-21 stealth bombers by the mid-2030s for about $80 billion. Already, six B-21 bombers are in production, the Air Force said. The new planes will eventually replace the aging B-1 and B-2 bomber fleets.

    Although the B-21’s flying-wing shape looks similar to that of the B-2, it has improved stealth technology and will be more supportable and maintainable than its predecessor, which has notoriously high maintenance costs.

    The bomber is designed to fly both crewed and uncrewed missions, reflecting technological updates that were not available when the B-2 was built in the 1980s.

    The Air Force plans to get its first few B-21 bombers, which are designed to fly long-range missions while evading radar detection, by the mid-2020s. The bomber is part of the U.S. military’s effort to update its nuclear triad, which includes warheads, submarines and missiles, as global rivals such as China also improve their weapons technology.

    The program has boosted aerospace employment in the Antelope Valley, long known for its aerospace manufacturing jobs. In December, more than 7,000 people were employed at Northrop Grumman’s Antelope Valley facilities, which is double the number there in 2015 when the company won the bomber contract.

    The B-21 Raider stealth bomber is unveiled at Northrop Grumman, Dec. 2, 2022, in Palmdale, Calif. The B-21 Raider has taken its first flight, moving the futuristic warplane closer to becoming the nation’s next nuclear weapons stealth bomber.

    (Marcio Jose Sanchez / Associated Press)

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    Samantha Masunaga

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  • Viasat revenue grows as investigation continues into malfunctioning $750 million satellite

    Viasat revenue grows as investigation continues into malfunctioning $750 million satellite

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    Viasat offices are shown at the company’s headquarters in Carlsbad, California, March 9, 2022.

    Mike Blake | Reuters

    Viasat reported a jump in quarterly revenue Wednesday, as the company continues to investigate its recent satellite malfunction and explores options to make up for some of the service it expected to add this year.

    The company, which reported fiscal 2024 first-quarter results, wrote in a letter to shareholders that the problem with the ViaSat-3 Americas communications satellite disclosed last month “creates unanticipated challenges that we are already addressing.”

    “We are currently working closely with our antenna supplier to assess the status of the antenna,” Viasat Chairman and CEO Mark Dankberg and President K. Guru Gowrappan wrote in the letter.

    Dankberg added on the company’s earnings call that Viasat expects to give an update on “corrective actions” for the the satellite at the end of its second quarter. Viasat has approximately $420 million in insurance on the malfunctioning satellite, “which is nearly half of the net book value” of ViaSat-3 Americas, putting its value at about $750 million.

    Viasat stock rose about 3% in after-hours trading from its close at $28.20 a share.

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    Viasat brought in $780 million in revenue during the quarter, a 36% increase compared to the same period last year.

    It reported a net loss of $77 million for the quarter, wider than a net loss of $21.6 million a year ago. It cited higher interest expenses, as well as costs related to its acquisition of Inmarsat. As of the end of quarter, Viasat had $5.5 billion in net debt, with about $2 billion in cash and equivalents.

    Viasat said it is investigating the root cause of the ViaSat-3 Americas problem to determine how to avoid the issue on its upcoming ViaSat-3 EMEA (Europe, the Middle East, and Africa) satellite. Beyond a problematic reflector, which appears to have been made by Northrop Grumman, Viasat said the Americas satellite’s other systems “are performing as expected, or better.”

    The company said it expects “to gain additional bandwidth from the existing in-orbit fleet” through improvements to its ground network. After its acquisition of Inmarsat, Viasat has 22 satellites in space.

    “We believe these augmentations will allow us to provide the high-quality experience our mobility customers have come to expect and allow us to support our near- and intermediate-term growth objectives,” Viasat said.

    While broadband service to U.S. residential customers makes up about 13% of Viasat’s current revenue, the company expects “that percentage will decline” after the satellite malfunction. Part of Viasat’s mitigation strategy is to “assure service” to high demand and key customers, as growth in VIasat’s fixed broadband business is expected to be delayed.

    Despite the issues, Viasat forecast that revenue will grow further in fiscal year 2025.

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  • Wall Street’s most overbought stocks include PepsiCo and this little-known insurance company

    Wall Street’s most overbought stocks include PepsiCo and this little-known insurance company

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  • Pentagon debuts its new stealth bomber, the B-21 Raider

    Pentagon debuts its new stealth bomber, the B-21 Raider

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    PALMDALE , Calif. — America’s newest nuclear stealth bomber made its debut Friday after years of secret development and as part of the Pentagon’s answer to rising concerns over a future conflict with China.

    The B-21 Raider is the first new American bomber aircraft in more than 30 years. Almost every aspect of the program is classified.

    As evening fell over the Air Force’s Plant 42 in Palmdale, the public got its first glimpse of the Raider in a tightly controlled ceremony. It started with a flyover of the three bombers still in service: the B-52 Stratofortress, the B-1 Lancer and the B-2 Spirit. Then the hangar doors slowly opened and the B-21 was towed partially out of the building.

    “This isn’t just another airplane,” Defense Secretary Lloyd Austin said. “It’s the embodiment of America’s determination to defend the republic that we all love.”

    The B-21 is part of the Pentagon’s efforts to modernize all three legs of its nuclear triad, which includes silo-launched nuclear ballistic missiles and submarine-launched warheads, as it shifts from the counterterrorism campaigns of recent decades to meet China’s rapid military modernization.

    China is on track to have 1,500 nuclear weapons by 2035, and its gains in hypersonics, cyber warfare and space capabilities present “the most consequential and systemic challenge to U.S. national security and the free and open international system,” the Pentagon said this week in its annual China report.

    ”We needed a new bomber for the 21st Century that would allow us to take on much more complicated threats, like the threats that we fear we would one day face from China, Russia, ” said Deborah Lee James, the Air Force secretary when the Raider contract was announced in 2015.

    While the Raider may resemble the B-2, once you get inside, the similarities stop, said Kathy Warden, chief executive of Northrop Grumman Corp., which is building the bomber.

    “The way it operates internally is extremely advanced compared to the B-2, because the technology has evolved so much in terms of the computing capability that we can now embed in the software of the B-21,” Warden said.

    Other changes include advanced materials used in coatings to make the bomber harder to detect, Austin said.

    “Fifty years of advances in low-observable technology have gone into this aircraft,” Austin said. “Even the most sophisticated air defense systems will struggle to detect a B-21 in the sky.”

    Other advances likely include new ways to control electronic emissions, so the bomber could spoof adversary radars and disguise itself as another object, and use of new propulsion technologies, several defense analysts said.

    “It is incredibly low observability,” Warden said. “You’ll hear it, but you really won’t see it.”

    Six Raiders are in production. The Air Force plans to build 100 that can deploy either nuclear weapons or conventional bombs and can be used with or without a human crew. Both the Air Force and Northrop also point to the Raider’s relatively quick development: The bomber went from contract award to debut in seven years. Other new fighter and ship programs have taken decades.

    The cost of the bombers is unknown. The Air Force previously put the price at an average cost of $550 million each in 2010 dollars — roughly $753 million today — but it’s unclear how much is actually being spent. The total will depend on how many bombers the Pentagon buys.

    “We will soon fly this aircraft, test it, and then move it into production. And we will build the bomber force in numbers suited to the strategic environment ahead,” Austin said.

    The undisclosed cost troubles government watchdogs.

    “It might be a big challenge for us to do our normal analysis of a major program like this,” said Dan Grazier, a senior defense policy fellow at the Project on Government Oversight. “It’s easy to say that the B-21 is still on schedule before it actually flies. Because it’s only when one of these programs goes into the actual testing phase when real problems are discovered.” That, he said, is when schedules start to slip and costs rise.

    The B-2 was also envisioned to be a fleet of more than 100 aircraft, but the Air Force built only 21, due to cost overruns and a changed security environment after the Soviet Union fell. Fewer than that are ready to fly on any given day due to the significant maintenance needs of the aging bomber.

    The B-21 Raider, which takes its name from the 1942 Doolittle Raid over Tokyo, will be slightly smaller than the B-2 to increase its range, Warden said. It won’t make its first flight until 2023. However, Warden said Northrop Grumman has used advanced computing to test the bomber’s performance using a digital twin, a virtual replica of the one unveiled Friday.

    Ellsworth Air Force Base in South Dakota will house the bomber’s first training program and squadron, though the bombers are also expected to be stationed at bases in Texas and Missouri.

    U.S. Sen. Mike Rounds, a Republican of South Dakota, led the state’s bid to host the bomber program. In a statement, he called it “the most advanced weapon system ever developed by our country to defend ourselves and our allies.”

    Northrop Grumman has also incorporated maintenance lessons learned from the B-2, Warden said.

    In October 2001, B-2 pilots set a record when they flew 44 hours straight to drop the first bombs in Afghanistan after the Sept. 11 attacks. The B-2 often does long round-trip missions because there are few hangars globally that can accommodate its wingspan, which limits where it can land for maintenance. The hangars also must be air-conditioned because the Spirit’s windows don’t open and hot climates can cook cockpit electronics.

    The new Raider will also get new hangars to accommodate its size and complexity, Warden said.

    However, with the Raider’s extended range, ’it won’t need to be based in-theater,” Austin said. “It won’t need logistical support to hold any target at risk.”

    A final noticeable difference was in the debut itself. While both went public in Palmdale, the B-2 was rolled outdoors in 1988 amid much public fanfare. Given advances in surveillance satellites and cameras, the Raider was just partially exposed, keeping its sensitive propulsion systems and sensors under the hangar and protected from overhead eyes.

    “The magic of the platform,” Warden said, “is what you don’t see.”

    ———

    Follow the AP’s coverage of the Air Force at https://apnews.com/hub/air-force.

    ———

    This story has been corrected to show the B-2 rollout was in 1988, not 1989.

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  • Cargo ship reaches space station despite jammed solar panel

    Cargo ship reaches space station despite jammed solar panel

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    This photo provided by NASA shows a Northrop Grumman cargo ship about to be captured by the International Space Station’s robot arm on Wednesday, Nov. 9, 2022. The capsule delivered more than 8,000 pounds of supplies to the International Space Station on Wednesday, despite a jammed solar panel. (NASA via AP)

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