Bath Iron Works ("BIW"), a business wing of
General Dynamics Corporation
), has received two contracts worth $49.4 million from the U.S
Navy under the DDG 51 Arleigh Burke-class guided missile
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Per the first contract, General Dynamics will be responsible for
providing lead yard services to the DDG 51 program. The
contract, worth $28.3 million, is a modification pact that
follows a contract initially received by the company earlier in
The second contract, worth $21.1 million, under the DDG 51
program was for post-shakedown availability ("PSA") for USS
Michael Murphy (DDG 112). The total value of the contract is
$27.1 million, if all the options are exercised. Though BIW will
remain the prime contractor, Bath Iron Works has teamed up with
BAE Systems, a subsidiary of BAE Systems plc (BAESY), for this
contract. The task is expected to be completed by August 2013.
DDG 51 Arleigh Burke-class features Aegis combat system, the
vertical launching system, advanced anti-submarine warfare
system, two embarked SH-60 helicopters, advanced anti-aircraft
missiles and Tomahawk anti-ship and land-attack missiles. This
makes it the most powerful surface combatant positioned in sea.
DDG 51 multi-mission guided missile destroyers provide a complete
array of anti-submarine, anti-air and anti-surface capabilities
by operating in support of carrier battle groups, surface action
groups, amphibious groups and replenishment groups.
Bath Iron Works is the lead shipyard and design agent for the DDG
51 Arleigh Burke-class. It has been providing design and
technical assistance for design upgrades and major changes to the
two shipyards that are currently building DDG 51-class destroyers
since 1987. Under the Navy's DDG 51 continuation program, BIW is
working on the construction of Rafael Peralta (DDG 115) and
Thomas Hudner (DDG 116). It had received a contract modification
worth $663 million for the construction of DDG 116 in February
This contract proves the company's capability of providing high
quality support and services anytime for the fleet of DDG
51-class of ships.
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; combat
vehicles, weapons systems and munitions; shipbuilding design,
repair and construction; and information systems, technologies
and services. Diversification of revenue through exposure to a
number of uncorrelated markets will keep the overall growth
momentum steady. However, with possibility of a cut in the
defense budget, the company presently retains a short-term Zacks
#3 Rank (Hold) that corresponds with our long-term Neutral
recommendation on the stock.
Some of its major peers are
Northrop Grumman Corporation
Lockheed Martin Corporation