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General Dynamics C4 Systems, a unit of General Dynamics Corp. (GD - Analyst Report), won a $111 million contract from the U.S. Army to deliver the next batch of WIN-T Inc 2 network nodes for additional brigade combat teams and division headquarters units.

The deal was offered to General Dynamics after the Army received the go-ahead from the Department of Defense to advance with a follow-on order for the Warfighter Information Network-Tactical (WIN-T) Increment 2 (Inc 2).

WIN-T 2 technology is the communications backbone of the Army and provides mission-critical voice, video and data to soldiers, in their mobile vehicles. The system offers commanders digitally enhanced situational awareness and the ability to direct from anywhere in the battle field. The WIN-T Increment 1 is currently deployed to 210 active duty, reserve and National Guard units.

The Win-T Inc 2 is primarily manufactured at General Dynamics’ facility in Taunton, Mass. The system proved effective when deployed in its first combat patrol in Afghanistan, using its on-the-move capability between several network nodes.

Currently, the first brigade-level deployment of the WIN-T Inc 2 system is supporting land forces of the 4th Brigade, 10th Mountain Division in Afghanistan. Their mission involves communications support to Afghan security forces in some of the most mountainous and remote locations of the country.

Modernizing defense technology is one of the primary agendas of the U.S. government in the upcoming fiscal 2014. The government has proposed a $67.5 billion allocation to the development of military technology which is expected to encourage General Dynamics’ future growth objectives.

Furthermore, the next generation Win-T Inc 3 program is expected to pick up pace in FY2018 and involves exponential enhancements in throughput on the line of sight transmission network and enabling an aerial layer to thicken the network.

Despite the budget austerity, we believe General Dynamics will remain well-positioned backed by its effective execution skills and diverse product offerings. At the moment, General Dynamics carries a Zacks Rank #2 (Buy).

Other well-placed defense operators include Zacks Ranked #2 Northrop Grumman Corp. (NOC - Analyst Report), Raytheon Company (RTN - Analyst Report) and B/E Aerospace, Inc. (BEAV - Snapshot Report).

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