GD in $12.8M Modified Contract - Analyst Blog
21 Janvier 2013 - 10:10AM
Zacks
Electric Boat, a wholly owned
subsidiary of General Dynamics Corporation (GD),
has received a contract modification to continue the development of
the Common Missile Compartment for the U.S. Ohio Replacement
Program and the United Kingdom's Successor ballistic-missile
submarine. The contract is worth $12.8 million.
Per the contract, the company will be responsible for procurement
of prototype material and equipment that is required for the
production of the Common Missile Compartment.
Originally, the company had received the contract in Dec 2008 for
engineering, technical services, concept studies and design of a
Common Missile Compartment for the next-generation ballistic
missile submarines being developed for the U.S. Navy and the Royal
Navy. The contract provided options, which if exercised, would
bring the contract value to $776 million.
Recently, in Jan 2013, the company received a contract to perform
research and development work for the next-generation strategic
deterrent submarine under the Ohio Replacement Program.
Simultaneously, the company also was supposed to continue the
development of Common Missile Compartment for Ohio Replacement
submarines and the UK Successor-class ballistic-missile submarine.
Common Missile Compartment is jointly owned by the U.S. Navy and
Royal Navy. Prior to that in November 2012, the company had
received a contract for the same.
The current contract brings the contract value to more than $770
million. The contracts are received as a result of the company’s
proven technical capabilities. The employees working under this
contract covers all aspects of the submarine life cycle, which
includes concept formulation and design through construction,
maintenance and modernization, and finally inactivation and
disposal.
Based in Falls Church, Virginia, General Dynamics engages in
mission-critical information systems and technologies; land and
expeditionary combat vehicles, armaments and munitions;
shipbuilding and marine systems; and business aviation.
General Dynamics’ revenue exposure is spread over a broad portfolio
of products and services in business aviation that allows it to
keep the overall growth momentum steady. Key growth drivers for the
company include improving business jet market, stable business of
U.S. military vehicles and strong cash flow generation.
On Jan 23, 2013, General Dynamics is expected to release its fourth
quarter and full year 2012 results. The Zacks Consensus
Estimates for fourth quarter 2012 and full year 2012 are currently
at $1.92 per share and $6.97 per share, respectively.
Like all defense majors, the future prospects of the company are
tied to the U.S. defense budget. With the possibility of a
cut in the defense budget, the company presently retains a
short-term Zacks Rank #3 (Hold) that corresponds with our long-term
Neutral recommendation on the stock.
Some of its main competitors are Lockheed Martin
Corporation (LMT), Northrop Grumman
Corporation (NOC) and Huntington Ingalls
Industries, Inc. (HII).
GENL DYNAMICS (GD): Free Stock Analysis Report
HUNTINGTON INGL (HII): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
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