GD Wins $25M FAA Order - Analyst Blog


A General Dynamics Corp. ( GD ) unit - General Dynamics C4 Systems - won a contract from the Federal Aviation Administration ("FAA") for new air traffic control radios.

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 facilities.

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 control.

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 Raytheon Company ( RTN ), United Technologies Corp. ( UTX ) and Northrop Grumman Corp. ( NOC ), 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 customers.

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).

GENL DYNAMICS (GD): Free Stock Analysis Report

NORTHROP GRUMMN (NOC): Free Stock Analysis Report

RAYTHEON CO (RTN): Free Stock Analysis Report

UTD TECHS CORP (UTX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BA , GD , NOC , RTN , UTX

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