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Defense contractor General Dynamics Corp. (GD - Analyst Report) won a contract worth $56 million from the U.S. military to provide support services for Iraqi M1A1 Abrams tanks.

Per this modification contract, General Dynamics will continue providing logistics and base lifecycle support services to Iraqi M1A1 Abrams tanks. Work on this latest contract will be performed by the existing General Dynamics employees in Iraq for 30 days.

Manufactured by a General Dynamics unit, General Dynamics Land Systems (“GDLS”), the M1A1 Abrams main battle tank is fitted with armor upgrades and additional mission-critical technologies to bolster crew situational awareness.

This situational awareness package boosts the M1A1 Abrams tank’s fighting potential. It provides an electronic graphic of the battlefield to soldiers with icons for friendly and enemy forces. It also enhances the precision of the tank commander’s .50 caliber machine gun.

Based in Falls Church, Va., 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.

Earlier this year, General Dynamics Land Systems received a contract worth $132.7 million from the U.S. Army TACOM Life Cycle Management Command for the Royal Saudi Land Forces. The contract calls for the company to produce and supply 69 Saudi M1A2 Abrams tanks to the Kingdom of Saudi Arabia. This contract is part of a plan by the Kingdom of Saudi Arabia to upgrade its fleet of tanks. Basically, the company will be supplying the improved M1A2S tanks.    

General Dynamics has been upgrading the kingdom's fleet of M1A1 and M1A2 tanks to the M1A2S configuration preferred by the Saudis. M1A2 SEP V2 is the most advanced digital tank with improved color displays, day and night thermal sights, commander remote operated weapon station (“CROWS II”), a Thermal Management System (“TMS”) and a tank-infantry phone. The M1A2S conversion increases the efficiency and capability of the tank.

Major international militaries from countries like Egypt, Kuwait, Saudi Arabia, Australia and Iraq, are the customers of Abrams tanks. General Dynamics’ Abrams tanks offer the troops with a proven and decisive edge. Survivability, mobility, adaptability and maintainability are important features of the tank. With these features, Abrams tanks are formidable and will dominate the battlefield.

General Dynamics presently retains a Zacks Rank #3 (Hold). The ongoing sequester hangs as a major threat to General Dynamics as well as other defense majors.

Among the stocks worth considering in the space are Lockheed Martin Corp. (LMT - Analyst Report), Northrop Grumman Corp. (NOC - Analyst Report) and Huntington Ingalls Industries, Inc. (HII - Snapshot Report), all with a Zacks Rank #2 (Buy).

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