General Dynamics Corporation ( GD )
completed the acquisition of IPW Holdings, a subsidiary of
IPWireless Inc., for an undisclosed amount. IPW Holdings has been
renamed General Dynamics Broadband and will operate as a subsidiary
of General Dynamics C4 Systems.
General Dynamics Broadband produces 3G and 4G Long Term
Evolution (LTE) wireless broadband network components and user
devices for end-to-end systems that enable first responders and
other mobile users to access lifesaving data and applications at
very high speeds. The company's products improve first responders'
effectiveness and safety by providing them with greater access to
Based in San Francisco, IPWireless Inc. supplies 3G and 4G LTE
wireless broadband network equipment and solutions to
first-responder and military customers. IPWireless Inc.
manufactures wireless-network components, user devices and
end-to-end systems that facilitate the first-responders to access
lifesaving data and applications at very high speeds. It also makes
tools such as real-time fingerprint identification and
high-resolution video for mobile users and military customers.
This is not the first time that General Dynamics has acquired a
company that provides wireless broadband network equipment. In July
last year, the company had purchased Fortress Technologies, Inc.,
which provides secure wireless networking equipment for the U.S.
military and other government customers.
As far as liquidity is concerned, the company seems to be well
placed with cash and cash equivalents of $2.6 billion as of March
31, 2012. In the first quarter of 2012, the company clocked pro
forma earnings of $1.70 per share, above the year-ago figure of
$1.64. Earnings also beat the Zacks Consensus Estimate by a
With an improving business jet market, its stable business of
U.S. military vehicles, and strong cash flow generation, we expect
the company to book profits going forward. However, we are
concerned as 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 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.
General Dynamics mainly competes with Lockheed Martin
Corporation ( LMT ) and Textron Inc. ( TXT
GENL DYNAMICS (GD): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
TEXTRON INC (TXT): Free Stock Analysis Report
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