General Dynamics Land Systems, a subsidiary of
General Dynamics Corporation
), has received a contract worth $132.7 million from the U.S.
Army TACOM Life Cycle Management Command for the Royal Saudi Land
Forces. Per the contract, the company will be responsible for the
production and supply of 69 Saudi M1A2 Abrams tanks to the
Kingdom of Saudi Arabia.
This contract from Saudi Arabia is part of a plan by the
Kingdom of Saudi Arabia to upgrade its fleet of tanks. Basically,
the company will be supplying the improved M1A2S tanks. The
company expects the task to be completed by July 31, 2014.
General Dynamics has been upgrading the kingdom's fleet of
M1A1 and M1A2 tanks to the M1A2S configuration preferred by the
Saudis. M1A2 SEP V2 is the most advanced digital tank with
improved color displays, day and night thermal sights, commander
remote operated weapon station ("CROWS II"), a Thermal Management
System ("TMS") and a tank-infantry phone. The M1A2S conversion
increases the efficiency and capability of the tank.
Several international armies, including Egypt, Kuwait, Saudi
Arabia, Australia and Iraq, are major customers of Abrams tanks.
General Dynamics' Abrams tanks provide the troops with a proven
and supreme decisive edge. Survivability, mobility, adaptability
and maintainability are important features of the tank. With
these features, Abrams tanks are formidable and will dominate the
In January 2012, the company had received the contract for
upgrading M1A1 tanks to the M1A2 Systems Enhancement Package
("SEP") V2 configuration. In February 2008, the company had
originally received the order from the U.S. Army TACOM Lifecycle
Management Command under which it was responsible for upgrading
435 M1A1 tanks that were in the Army's inventory for more than 20
The company is continuously working on conversion of the tanks
to the M1A2 SEP V2 configuration. Moreover, the company is
developing further upgrades proposed for the Continuous
Electronics Enhancement Program ("CEEP") building on the latest
SEP and Tank Urban Survivability Kit ("TUSK") configurations of
M1A1 and M1A2 main battle tanks.
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Based in Falls Church, Virginia, 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.
Recently, the company procured three contracts worth $4.6 billion
from the U.S Navy for designing and developing the
next-generation strategic deterrent submarine. The contracts also
included the task of constructing and purchasing of materials for
Virginia-class attack submarines. This indicates that its revenue
exposure is spread over a broad portfolio of products and
services. This exposure to a number of uncorrelated markets will
keep the overall growth momentum steady.
Northrop Grumman Corporation
Lockheed Martin Corporation
), the future prospects of the General Dynamics are also tied to
the U.S. defense budget, which remains a matter of concern. The
company presently retains a short-term Zacks Rank #3 (Hold) that
corresponds with our long-term Neutral recommendation on the