General Dynamics Corporation
) 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
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)
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
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
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
Huntington Ingalls Industries Inc.
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