General Dynamics Corporation
's (
GD
) unit, General Dynamics Information Technology, has entered into
an agreement, worth $41.8 million with the U.S. Army Medical
Research Materiel Command ("USAMRMC") under its TRICARE Evaluation,
Analysis and Management Support ("TEAMS") contract program.
Per this task order, the company will offer service support
assistance to the USAMRMC for vaccine, drug and medical device
development programs under the U.S. Army Medical Materiel
Development Activity ("USAMMDA"). The tenure of the TEAMS contract
program is four years and seven months.
USAMMDA is the U.S. Department of Defense's ("DoD") advanced
medical materiel development initiative for designing new products
to protect and preserve the lives of service members. It creates
new types of vaccines, drugs and medical support devices, which
subsequently enhance readiness while providing better standard of
quality medical care to the DoD. Further, it also maximizes the
survival rates related to medical casualties in the battleground.
In the future, General Dynamics will provide a wide array of
services to facilitate the USAMMDA guide for new medical
technologies through the USFDA regulatory and certification
procedures. The company will also work on strategies to convey
these new products into the end users.
As per the U.S. Food and Drug Administration ("USFDA") regulatory
and certification, the USAMMDA works along with the USAMRMC to
develop medical materials for battlefield personnel.
During second-quarter 2012 earnings call, General Dynamics lowered
its full-year 2012 earnings guidance range to $7.00 - $7.10 per
share from its earlier projection of $7.10 - $7.20 per share. This
earnings revision was primarily due to the possibility of a delay
in the awarding of contract of Information Systems and Technology's
tactical communications business. At the end of second-quarter
2012, General Dynamics' total order backlog was $52.4 billion, down
from the year-ago backlog of $57.1 billion.
As per the Zacks Consensus Estimate, General Dynamics'
third-quarter and full-year 2012 earnings per share are expected to
be $1.77 and $7.10, respectively.
We view General Dynamics Corporation as an organization with strong
revenue exposure in wide range of products and services like
business aviation, combat vehicles, weapons systems, shipbuilding
design, repair and construction, and information systems. We
believe this expanded series of products and services will ensure
the company to keep its overall growth momentum steady in the
future.
We are skeptical about the challenges of budget cutbacks and the
risks related to the execution of key projects. General Dynamics
Corporation currently retains a Zacks #3 Rank (Hold rating).
Falls Church, Virginia-based 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. The company
competes with
Lockheed Martin Corporation
(
LMT
).
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