General Dynamics Corporation's (
) business unit General Dynamics Information Technology has
received a five-year contract worth $22 million to provide supply
chain management services to Bureau of Diplomatic Security, which
is the security and law enforcement arm of the United States
Department of State. If all the options are exercised, the
potential value of the contract is $2.2 billion.
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Supply chain management service engages in the design, planning,
execution, control, and monitoring of supply chain activities with
the goal of creating net value, building a competitive
infrastructure, leveraging worldwide logistics, and synchronizing
supply with demand.
Per the contract, the company will deliver a full-spectrum global
supply chain management solution. This includes providing the
technology infrastructure required to integrate and manage the
synchronized flow of security equipment and related information to
more than 430 facilities worldwide. This task will ensure that
up-to-date and accurate information about equipment status,
lead-time and shipment-tracking information is being provided to
the State Department, its embassies and annexes.
General Dynamics Information Technology is a part of Information
Systems and Technology, a subsidiary of General Dynamics
Corporation. General Dynamics Information Technology delivers
innovative, agile and comprehensive logistics solutions that ensure
that requirements from customers to carry out their missions are
General Dynamics has expertise in implementing new logistics
systems or modernizing and maintaining existing systems that help
in addressing critical supply chain challenges. Moreover, its
diversified revenue structure in a number of uncorrelated markets
keeps the overall growth momentum steady.
However, the company is largely tied to the U.S. defense budget,
where the threat of budget cuts is high. Also, we have turned
slightly cautious about the company's steadily dropping order
backlog, 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.
Based in Falls Church, Virginia, General Dynamics Corporation
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 along with its peer Northrop Grumman Corporation (
) is expected to release second quarter earnings on July 25, 2012.
The Zacks Consensus Estimates for General Dynamics for second
quarter 2012 and fiscal 2012 are $1.75 and $7.17, respectively.