General Dynamics Gets $94.4M Order - Analyst Blog


General Dynamics Corporation 's ( GD ) business unit, General Dynamics Information Technology, has received a three and a half years contract worth $94.4 million to support the Total Integrated Ground Equipment Readiness Contractor Logistics Support (TIGER CLS) contract of U.S. Marine Corps Systems Command.

The contract follows a multiple-award, indefinite delivery, indefinite quantity contract awarded in May 2010 worth $6.6 billion if all options are exercised under Defense Intelligence Agency ("DIA") Solutions for the Information Technology Enterprise (SITE) contract.

Per the current contract, the company will provide command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems with lucrative, novel technology, logistics and program management support. These C4ISR systems provide critical information and communications links to numerous stakeholders worldwide of Marine Corps' intelligence units.

Apart from this contract, General Dynamics Information Technology has been managing daily operations of global mission-critical IT services for Defense and Intelligence Community customers for a long time. The business unit has been successful in delivering IT solutions for the Battlefield Information Collection and Exploitation System, INSCOM Information Technology Support Services and the Air Force Distributed Common Ground System programs.

Acquisition of companies like Open Kernel Labs, Inc. and Fidelis Security Systems, Inc. has added to the portfolio of General Dynamics Information Technology and helped it to complete its task orders.

Going forward, key growth drivers for the company include the improving business jet market, its stable business of U.S. military vehicles, an ongoing share repurchase program and strong cash flow generation. However, the company is largely tied to the U.S. defense budget, where the threat of budget cuts is looming. Also, we are concerned about the risks related to the execution of key projects.

The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.

General Dynamics is expected to release its third quarter 2012 results on October 24, 2012. The Zacks Consensus Estimates for the third quarter and full year 2012 are $1.77 and $7.10, respectively.

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. The company operates through four segments: Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace.

The company mainly competes with Northrop Grumman Corporation ( NOC ) and Huntington Ingalls Industries Inc. ( HII ).


GENL DYNAMICS (GD): Free Stock Analysis Report
HUNTINGTON INGL (HII): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): 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: GD , HII , NOC

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