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General Dynamics (GD) Unit Wins $92M U.S. Army Contract

Zacks Equity Research

General Dynamics Corporation’s GD subsidiary, Land Systems, won a contract worth $92.2 million from the U.S. Army for 6 system-enhanced program of the Abrams M1A2 tanks. The contracting activity is Army Contracting Command, Warren, MI.

Work will be performed in Lima, OH; Scranton, PA; Anniston, AL; and Tallahassee, FL, and is expected to be complete by Jul 31, 2017.

M1A2 SEP V2 is the most technologically advanced digital tank, which features improved color displays, day and night thermal sights, a package of third-generation steel-encased depleted uranium armor, commander remote operated weapon station, second-generation FLIR thermal sights that include Commander’s Independent Thermal Viewer (“CITV”) for ‘hunter-killer’ operation Under Armor Auxiliary Power Unit. CITV allows crews to run key electronics without running the engine, a Thermal Management System (“TMS”) and a tank infantry phone. The M1A2S conversion is aimed to increase the efficiency and capability of the tank. It is designed to overcome challenges of new and emerging threats associated with next-generation warfare.

Over the years, General Dynamics has maintained a longstanding strategic alliance with the U.S. defense establishments and tries to meet its commitments in terms of maintaining product and service standards along with delivery timing. The company’s Abrams tanks provide troops with a proven and supreme decisive edge. Apart from these, survivability, mobility, adaptability and maintainability are other important features of the tank. These traits make the Abrams tanks formidable and invincible on the battlefield.

We remind investors that General Dynamics not only reported better-than-expected third-quarter earnings but also raised its 2015 profit guidance on higher defense orders and solid demand for its Gulfstream planes. Revenues increased 3.1% driven mainly by the Marine segment (up 14.7%). The company’s revenues are derived from a broad portfolio of products and services that help to keep the overall growth momentum steady.

Zacks Rank

General Dynamics currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the aerospace and defense sector are Leidos Holdings, Inc. LDOS, Boeing Company BA and Huntington Ingalls Industries, Inc. HII. While Leidos sports a Zacks Rank #1 (Strong Buy), both Boeing and Huntington Ingalls carry the same rank as General Dynamics.

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