Aerospace and defense operator
General Dynamics Corp.
) received a $562.2 million contract from the U.S. Department of
Defense (DoD) to supply Ground Mobility Vehicles 1.1 (GMV 1.1), a
modified Humvee. This contract is a part of 17 contracts worth
above $1.4 billion awarded by the DoD on Aug 22.
Ground Mobility Vehicles 1.1 will feature a heavier suspension,
more powerful engine, more rugged tires, improved ground
clearance, and an open bed that is used by the U.S. Special
These vehicles will be used by defense personnel for support
operations such as direct action, special reconnaissance,
unconventional warfare, counter-terrorism, security force
assistance and counterinsurgency (COIN) missions. The U.S.
defense forces often have to operate in difficult terrain and
extremely hostile conditions to counter terrorism and neutralize
high value targets. The vehicle will provide a tactical advantage
to defense personnel in combat.
General Dynamics' Ordnance and Tactical Systems division will be
looking after the delivery of the vehicles. These vehicles will
be highly mobile and could be transported by a Chinook
helicopter. The production contract is expected to run for seven
years and conclude in Sep 2020, ensuring a steady flow of
The company registered a positive earnings surprise of 11.73% in
the second quarter. The positive results and consistent contract
wins have driven the Zacks Consensus Estimate for 2013 2.9%
higher in the last 30 days to $6.96 per share, reflecting
year-over-year growth of 7.3%.
General Dynamics currently retains a Zacks Rank #2 (Buy). The
long-term earnings growth of the company is 5.57% on the back of
sales growth of 1.31%.
Some of its main competitors,
Lockheed Martin Corp.
Northrop Grumman Corp.
The Boeing Company
) also carry a Zacks Rank #2.
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