General Dynamics Corp.
) unit - General Dynamics C4 Systems - won a contract from the
Federal Aviation Administration ("FAA") for new air traffic
This order worth $25 million calls for General Dynamics to supply
new CM-300/350 radios as well as related accessories and training
materials. These radios are software-defined and feature built-in
voice over Internet protocol. Per the first production order from
the FAA, radios will be installed in airport terminal air traffic
control sites, regional control centers and other aviation
The company had earlier received a $10 million contact to qualify
and certify the new radios under an
indefinite-delivery/indefinite-quantity award. That contract was
awarded last year and was a part of FAA's Next Generation
Air/Ground Communications (NEXCOM) Segment 2 program. This is the
second phase of NEXCOM whose mission is to modernize aging air to
ground (A/G) equipment infrastructure used for air traffic
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.
Following the partial U.S. government shutdown announcement on
Oct 1, 2013, receiving federal contracts is surely a sign of
relief for the defense pros. Big defense players suffering the
brunt of the shutdown include
United Technologies Corp.
Northrop Grumman Corp.
), all of which witnessed a 3.3%, 3.1% and 1.2% respective
decline in their share prices since Oct 1, 2013.
Also, The Boeing Company (BA) indicated that it could face some
disruptions with respect to delivery schedule as some of its
aircraft require approval of furloughed Federal Aviation
Administration inspectors before they can be delivered to
In this scenario, contracts like this will keep the momentum
intact for General Dynamics. Recently, General Dynamics C4
Systems won a $111 million contract from the U.S. Army to deliver
the next batch of WIN-T Inc 2 network nodes for additional
brigade combat teams and division headquarters units.
Despite the budget austerity, we believe General Dynamics will
remain well-positioned backed by its effective execution skills
and diverse product offerings. At the moment, General Dynamics
carries a Zacks Rank #3 (Hold).
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