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General Dynamics Wins $105M Deal to Serve USS Makin Island
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National Steel and Shipbuilding Co. (NASSCO), a subsidiary of General Dynamics Corp. (GD - Free Report) , recently secured a contract for the execution of USS Makin Island (LHD 8) fiscal 2017 dry-docking phased maintenance availability. Work related to this deal will be carried out in San Diego, CA.
Details of the Deal
Valued at $105.4 million, the contract was awarded by the Naval Sea Systems Command, Washington, DC. Moreover, the cumulative value of this contract can be up to $106 million, if the options included in this agreement are exercised.
Per the terms, the availability will include a combination of maintenance, modernization and repair of USS Makin Island. The contract will utilize fiscal 2017 operations and maintenance (Navy), and other procurement (Navy) funding to finance the work, which is scheduled to be over by Sep 2018.
A Brief Note on USS Makin Island
Renowned military shipbuilder Huntington Ingalls Industries’ (HII - Free Report) Ingalls Shipbuilding division began building the third generation large deck amphibious ships — the Wasp class landing helicopter dock (LHD) – in the 1980s. USS Makin Island is the eighth and final WASP-class Amphibious Assault Ship — the only ship in her class powered by LM 2500+ Gas Turbine Engines and Electric Drive — that has been delivered to the Navy in 2009. Additionally, Makin Island is the only LHD to feature an all-electric design.
Ships from this class have participated in numerous combat operations, such as Operation Desert Storm and Operation Enduring Freedom, as well as disaster-relief efforts and humanitarian-aid missions.
Our View
General Dynamics’ NASSCO offers the only major ship-construction yard on the West Coast of the U.S. that is capable of maintaining or repairing any ocean-going vessel. Because of its location, expertise and shipyard capabilities, NASSCO is a Master Ship Repair contractor for the U.S. Navy and serves as a principal repair facility for its Pacific Fleet ships.
Currently, NASSCO is building Expeditionary Sea Base (ESB) auxiliary support ships to improve the Navy’s ability in delivering large-scale equipment and expeditionary forces to areas without adequate port access. The ESBs, equipped with a 52,000-square-foot flight deck and accommodations for up to 250 personnel, are capable of supporting a variety of missions, including airborne mine countermeasure, maritime security operations and disaster relief. The first three ships in the program have been delivered while construction is underway on the fourth and fifth ships, scheduled for delivery in 2018 and 2019, respectively.
Moreover, the company’s revenue exposure is spread over a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; and shipbuilding design, which in turn helps in keeping overall growth momentum steady.
NASSCO has been the Navy’s prime contractor for the continuous maintenance of several amphibious classes of ships homeported on the West Coast, for more than one decade. This, in turn, makes it a major factor in the consistent growth trajectory that the company has been maintaining of late. Impressively, General Dynamics’s earnings surpassed the Zacks Consensus Estimate in the preceding four quarters with an average of 5.20%. We believe that a steady flow of contracts from the Pentagon, like the aforementioned ones, will enable the company to similarly outperform the industry in the days ahead as well.
Shares of General Dynamics have rallied 40.6% in the past year, outperforming the Zacks categorized Aerospace-Defense industry’s gain of 24.6%. This could be because General Dynamics consistently maintains a strategic alliance with the U.S. Department of Defense that allows it to enjoy a steady flow of contracts. Consistent deal wins also allows it to keep up with its peers like The Boeing Co. (BA - Free Report) and Lockheed Martin Corp. (LMT - Free Report) .
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General Dynamics Wins $105M Deal to Serve USS Makin Island
National Steel and Shipbuilding Co. (NASSCO), a subsidiary of General Dynamics Corp. (GD - Free Report) , recently secured a contract for the execution of USS Makin Island (LHD 8) fiscal 2017 dry-docking phased maintenance availability. Work related to this deal will be carried out in San Diego, CA.
Details of the Deal
Valued at $105.4 million, the contract was awarded by the Naval Sea Systems Command, Washington, DC. Moreover, the cumulative value of this contract can be up to $106 million, if the options included in this agreement are exercised.
Per the terms, the availability will include a combination of maintenance, modernization and repair of USS Makin Island. The contract will utilize fiscal 2017 operations and maintenance (Navy), and other procurement (Navy) funding to finance the work, which is scheduled to be over by Sep 2018.
A Brief Note on USS Makin Island
Renowned military shipbuilder Huntington Ingalls Industries’ (HII - Free Report) Ingalls Shipbuilding division began building the third generation large deck amphibious ships — the Wasp class landing helicopter dock (LHD) – in the 1980s. USS Makin Island is the eighth and final WASP-class Amphibious Assault Ship — the only ship in her class powered by LM 2500+ Gas Turbine Engines and Electric Drive — that has been delivered to the Navy in 2009. Additionally, Makin Island is the only LHD to feature an all-electric design.
Ships from this class have participated in numerous combat operations, such as Operation Desert Storm and Operation Enduring Freedom, as well as disaster-relief efforts and humanitarian-aid missions.
Our View
General Dynamics’ NASSCO offers the only major ship-construction yard on the West Coast of the U.S. that is capable of maintaining or repairing any ocean-going vessel. Because of its location, expertise and shipyard capabilities, NASSCO is a Master Ship Repair contractor for the U.S. Navy and serves as a principal repair facility for its Pacific Fleet ships.
Currently, NASSCO is building Expeditionary Sea Base (ESB) auxiliary support ships to improve the Navy’s ability in delivering large-scale equipment and expeditionary forces to areas without adequate port access. The ESBs, equipped with a 52,000-square-foot flight deck and accommodations for up to 250 personnel, are capable of supporting a variety of missions, including airborne mine countermeasure, maritime security operations and disaster relief. The first three ships in the program have been delivered while construction is underway on the fourth and fifth ships, scheduled for delivery in 2018 and 2019, respectively.
Moreover, the company’s revenue exposure is spread over a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; and shipbuilding design, which in turn helps in keeping overall growth momentum steady.
NASSCO has been the Navy’s prime contractor for the continuous maintenance of several amphibious classes of ships homeported on the West Coast, for more than one decade. This, in turn, makes it a major factor in the consistent growth trajectory that the company has been maintaining of late. Impressively, General Dynamics’s earnings surpassed the Zacks Consensus Estimate in the preceding four quarters with an average of 5.20%. We believe that a steady flow of contracts from the Pentagon, like the aforementioned ones, will enable the company to similarly outperform the industry in the days ahead as well.
Zacks Rank
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Movement
Shares of General Dynamics have rallied 40.6% in the past year, outperforming the Zacks categorized Aerospace-Defense industry’s gain of 24.6%. This could be because General Dynamics consistently maintains a strategic alliance with the U.S. Department of Defense that allows it to enjoy a steady flow of contracts. Consistent deal wins also allows it to keep up with its peers like The Boeing Co. (BA - Free Report) and Lockheed Martin Corp. (LMT - Free Report) .
3 Stocks to Ride a 588% Revenue Explosion
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>