General Dynamics to Render Nuclear Submarine Support
General Dynamics Corporation (GD) unit Electric Boat recently received a contract worth $310.8 million from the U.S. Navy, for support of active nuclear submarines. Although the share price of this defense company edged down 1.6% on Sep 25, 2014, it has increased 33.6% so far this year, outperforming the S&P 500’s gain of 7.3%.
Under this modification contract, General Dynamics will act as the design agent and planning yard, as well as render engineering and technical support for active nuclear submarines. Roughly 73% of the work under this contract will be done in Groton, CT while the remaining in Bangor, WA (9%); Norfolk, VA (6%); Newport, RI (4%); Quonset, RI (3%); Kings Bay, GA (3%); and Pearl Harbor, HI (2%).
The contract is slated for completion by Sep 2015 and the Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity.
Earlier this month, General Dynamics Electric Boat had received a similar $234.2 million contract from the U.S. Navy, for support of active nuclear submarines. The contract had options which if exercised could extend the total contract value to $1.5 billion.
General Dynamics is one of the largest U.S. defense contractors whose revenue exposure is spread over a broad portfolio of products and services that help it to keep the overall growth momentum steady. The company is one of the two contractors equipped to build nuclear-powered submarines in the U.S. with the other company being Huntington Ingalls Industries (HII).
On Apr 2014, General Dynamics Electric Boat Corp. had received one of the biggest shipbuilding contracts when the U.S. Navy ordered the construction of 10 additional Virginia class submarines in a single block. Per the $17.6 billion, fixed-price, multi-year contract, the company will deliver two submarines per year over five years (read more: General Dynamics to Build Navy Subs for $17.6B).
General Dynamics, holding a Zacks Rank #2 (Buy), has performed consistently over the past few quarters. The company was able to surpass the Zacks Consensus Estimate in the last four quarters with an average beat of 5.46%.
Some other well-ranked stocks in the aerospace and defense industry include The Boeing Company (BA) and Air Industries Group (AIRI). Air Industries holds a Zacks Rank #1 (Strong Buy), while Boeing carries a Zacks Rank #2 (Buy).
Read the Full Research Report on GD
Read the Full Research Report on BA
Read the Full Research Report on HII
Read the Full Research Report on AIRI
Zacks Investment Research
