General Dynamics (GD) to Upgrade Canada's LAV III Vehicles - Analyst Blog

Aerospace and defense operator General Dynamics ( GD ) said that its unit General Dynamics Land System-Canada was awarded a $253.4 million (C$ 287 million) contract by the Canadian government to upgrade Canadian LAV III vehicles, also known as LAV 6.0.

The contract calls for the provision and integration of a surveillance system onto the LAV 6.0 vehicles. The systems to be fixed will include a 10-meter retractable mast, an Operator Control Station and a surveillance suite inclusive of radar, thermal/day and image intensification sights, laser range finder and GPS mounted on a stabilized platform.

The above mentioned add-ons will provide better detection ranges, on-the-move operation, integrated silent watch power management and the transmission of images through the communications system. The importance of a properly coordinated surveillance system is unquestionable in today's warfare. Proper surveillance can help prevent an act of terror even before it actually happens.

General Dynamics will start delivering the surveillance suite from Dec 2016. General Dynamics Land System-Canada has been working with the Canadian government for the last 37 years.

Just as the U.S. defense majors are concerned about the trimming of the defense budget, foreign military sales like the one received by the General Dynamics Canadian unit will bring in the much needed respite.

General Dynamics performed well in the third quarter of 2014, reporting earnings of $2.05 per share on a diluted basis, comfortably surpassing the Zacks Consensus Estimate of $1.91 by 7.3%. The consensus estimate for the fourth quarter is $2.08 per share implying a sequential rise in performance.

General Dynamics currently holds a Zacks Rank #2 (Buy). Other well-ranked stocks in the aerospace and defense space include Boeing Company ( BA ), Engility Holdings, Inc. ( EGL ) and Air Industries Group ( AIRI ). All three stocks carry the same Zacks Rank as General Dynamics.

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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 Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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