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Aerospace and defense operator General Dynamics Corporation ( GD - Analyst Report ) announced that its unit Dynamics Armament and Technical Products received a $6.1 million contract from the U.S. Army Contracting Command, Warren, Michigan.
Per the contract, the company will manufacture 25 Army Standard Family (ASF) expandable mobile shelters. These mobile shelters, part of a multi-year contract awarded to the company in December 2010, will be delivered in 2013. The current order takes the total contract value for the mobile shelters to $26 million.
The expandable mobile shelters are an integral part of the U.S. army’s global missions as these allow effective operations even in extreme climatic conditions. These shelters are made of aluminum-faced, non-metallic, honeycomb-sandwich panels. These shelters have signal distribution capabilities, environmental control units and lighting facilities.
These are also easily transferable and can be deployed quickly when required. General Dynamics has proven its expertise in this particular niche supplying mobile shelters to the army for more than four decades now.
General Dynamics Armament and Technical Products is part of General Dynamics’ Combat System group. In the first quarter of 2012, Combat System reported revenues of $1.91 billion, down 2.3% from the year-earlier quarter. General Dynamics expects earnings per share for 2012 to be in the band of $7.10 to $7.20. The Zacks Consensus Estimate of $7.17 is on the higher end of the guidance.
The U.S. Government contracts contribute a major portion of General Dynamics’ revenue. In 2011, 69% of the revenue of the company was generated from government contracts. In this context, the gradual trimming down of the U.S. defense budget is surely a cause of concern. However, we believe the company’s diverse product portfolio will to a great extent dilute the risk.
General Dynamics currently retains a Zacks #3 Rank (short-term Hold rating). Some of its main competitors, Lockheed Martin Corporation ( LMT - Analyst Report ) and Textron Inc. ( TXT - Analyst Report ) , also carry Zacks # 3 Ranks.
Based in Falls Church, Virginia, General Dynamics, with its units, operates in business aviation, land and expeditionary combat systems, armaments and munitions, shipbuilding and marine systems, and information systems and technologies.
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