General Dynamics Corporation
), unit General Dynamics Ordnance and Tactical Systems has received
three contracts for ammunitions and cartridges worth $97 million
from the U.S. Army Contracting Commands, Picatinny Arsenal, New
Jersey, and Rock Island, Ill.
Per the contract, the company will manufacture and deliver 120mm
M865 and M1002 tank training ammunition, 105mm M1130 high-explosive
("HE") pre-formed fragmentation ("PFF") cartridges and 155mm M795
HE projectile metal parts.
The M865 utilizes a unique cone stabilizer to limit the safety
fan required for tank gunnery. It is used for the Army's 120mm
smooth-bore M256 cannon and U.S. Marine Corps' Abrams main battle
tanks. The cone stabilizer has a safety feature that restricts the
overall flight range below 8 km and reduces the need for extreme
range safety fans.
The M1002 Target Practice Multipurpose Tracer (TPMP-T) training
cartridge supplies matched exterior ballistics to the M830A1 High
Explosive Anti-Tank Multi-Purpose Tracer (HEAT-MP-T) tactical
cartridge. It has a dummy air and ground switch, and is matched
ballistically to the time-of-flight parameters of the M830A1. Its
tailcone stabilizer also provides a safety feature that confines
the overall flight range to less than 8km and therefore reduces the
requirement for extreme-range safety fans.
The 105mm M1130 HE PFF ammunition is the latest addition to the
Army's 105mm ammunition category and is used as ammunition for the
M119 towed howitzer. It has a PFF warhead that is far more
lethal in comparison to the current 105mm HE projectiles. The
incorporation of tungsten wires into the projectile body walls
leads to the PPF effect. The projectile is also equipped with a
grommet and a lifting plug to protect the rotating band.
The M795 is a 155mm HE projectile. It has greater efficiency and
covers a longer range when compared to the M107. This
high-explosive/high-fragmentation artillery projectile is used in
combination with the M109A6 Paladin self-propelled howitzer and the
M777 and M198 towed howitzers.
General Dynamics expects to complete the supply and delivery of
155mm artillery ammunition in February 2013, 105mm artillery
ammunition by April 2014 and 120 tank ammunition by September
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. It is the leading tank and artillery ammunition producer
providing high-performance ammunition to U.S. armed forces.
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, that
helps in keeping the overall growth momentum steady. Other key
drivers of growth include its improving business jet market, and
its stable U.S. military vehicles business.
However, we are concerned due to the threat of budget cuts and
risks related to the execution of key projects. 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 main competitors are
Lockheed Martin Corporation
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