Back to top

Analyst Blog

General Dynamics Corporation’s (GD - Analyst Report) business unit, General Dynamics Information Technology, has received a three and a half years contract worth $94.4 million to support the Total Integrated Ground Equipment Readiness Contractor Logistics Support (TIGER CLS) contract of U.S. Marine Corps Systems Command.

The contract follows a multiple-award, indefinite delivery, indefinite quantity contract awarded in May 2010 worth $6.6 billion if all options are exercised under Defense Intelligence Agency (“DIA”) Solutions for the Information Technology Enterprise (SITE) contract.

Per the current contract, the company will provide command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems with lucrative, novel technology, logistics and program management support. These C4ISR systems provide critical information and communications links to numerous stakeholders worldwide of Marine Corps’ intelligence units.

Apart from this contract, General Dynamics Information Technology has been managing daily operations of global mission-critical IT services for Defense and Intelligence Community customers for a long time. The business unit has been successful in delivering IT solutions for the Battlefield Information Collection and Exploitation System, INSCOM Information Technology Support Services and the Air Force Distributed Common Ground System programs.

Acquisition of companies like Open Kernel Labs, Inc. and Fidelis Security Systems, Inc. has added to the portfolio of General Dynamics Information Technology and helped it to complete its task orders.

Going forward, key growth drivers for the company include the improving business jet market, its stable business of U.S. military vehicles, an ongoing share repurchase program and strong cash flow generation. However, the company is largely tied to the U.S. defense budget, where the threat of budget cuts is looming. Also, we are concerned about the risks related to the execution of key projects.

The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.

General Dynamics is expected to release its third quarter 2012 results on October 24, 2012. The Zacks Consensus Estimates for the third quarter and full year 2012 are $1.77 and $7.10, respectively.

Based in Falls Church, Virginia, 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. The company operates through four segments: Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace.

The company mainly competes with Northrop Grumman Corporation (NOC - Analyst Report) and Huntington Ingalls Industries Inc. (HII - Snapshot Report).

 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SOUTHWEST A… LUV 31.99 +2.40%
CHINA BIOLO… CBPO 47.40 +2.20%
MALLINCKROD… MNK 72.32 +1.97%
PLANAR SYST… PLNR 4.30 +1.78%
GILEAD SCIE… GILD 103.80 +1.50%