New defence giant Northrop Grumman has walked onto the stage at the Farnborough Air Show, after an aggressive acquisition spree, and predicted boom times ahead.

Northrop, maker of the B2 bomber and the Global Hawk combat drone, is now ranked as the third biggest US defence contractor after taking over US defence and auto group TRW for $7.8bn month and acquiring ship builders and electronics groups Litton Industries and Newport News.

We are going to see 8% to 9% compound annual growth rate in defence expenditure over the coming years and we'll do at least double digit earnings growth

Ron Sugar Northrop Grumman

The deals have established Northrop as one of a handful of companies, including Boeing and Lockheed Martin, who can handle the biggest US defence contracts.

Chief operating officer Ron Sugar is ecstatic.

"We sure are pleased, I can tell you (TRW) is going to be a good fit," he told BBC News Online at the Farnborough Air Show.

"We do not need to make any more acquisitions at this point," he added after snatching TRW from the hands of the UK's biggest defence group BAE Systems.

Big profits

Mr Sugar said the acquisition had come at just the right time because despite falling stock markets, defence expenditure was growing for the first time in many years, making his company recession proof.

"We are going to see 8% to 9% compound annual growth rate in defence expenditure over the coming years and we'll do at least double digit earnings growth," he said.

"The fundamentals haven't changed one bit over the recent months and, if anything, our company is stronger and long term it's going to be pretty successful."

Turnaround

The company's fortunes have seen a dramatic turnaround from four years ago when the US government blocked a merger with Lockheed Martin.

Its prospects then looked bleak as defence budgets were being cut in the US and around the world but now there is a whole new world of opportunities.

"We made some assessments before 11 September that total peace would not prevail in our time and it turns out now that the very same systems that are necessary for precision strike, as demanded in a bi-polar world, are very effective in conflicts like Afghanistan," Mr Sugar said.

Northrop has also just been awarded a significant role as the lead contractor in the DDX programme, which is the US navy ship equivalent of the JSF