GD Unit Wins Navy Contract

General Dynamics Corporation’s (GD - Analyst Report) business wing General Dynamics Advanced Information Systems has received a contract worth $19.3 million from the U.S. Navy for the production of Type-3 advanced mission computers (“AMC”). These mission computers will be employed in the F/A-18E/F and E/A-18G Super Hornet aircraft.

Advanced mission computers are the vital components of the Super Hornet. With high-reliability mission and display-processing system, these AMCs can process high-speed data flows from the latest sensor technologies. The system is used for input/output, video, voice and graphics processing and can perform tasks in extreme environmental conditions.

General Dynamics has been delivering F/A-18 AMCs since 2002. Last year the company delivered the 1500th AMC to the U.S. Navy. The contract will be performed at the General Dynamics facility in Bloomington, Minnesota. The company expects the task to be completed by the end of 2014.

General Dynamics Advanced Information Systems, a unit of Information Systems and Technology, provides intelligence, surveillance and reconnaissance solutions across all domains. The segment is progressing well with a number of contracts.

Recently, it received a contract from the Department of Homeland Security to support the National Cybersecurity Protection System. Segment backlog at the end of fourth quarter 2012 was $9.8 billion versus $9.6 billion at the end of the fourth quarter of 2011.

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 uses commercial off-the-shelf products and an open architecture that enhances capability and keeps lifecycle costs down. This feature has allowed the Navy to increase flexibility and strengthen performance capabilities.

Moreover, General Dynamics’ diversified revenue exposure that is spread over a broad portfolio of products and services helps in keeping the overall growth momentum steady. Going forward, we expect sizeable contracts, acquisitions and the company’s focus on improving margins and earnings to help the company’s future prospects.

However, uncertainty related to the defense budgets and U.S debt situation remain an overhang for the company. The company presently retains a short-term Zacks Rank #3 (Hold).

Other stocks worth considering are The Boeing Company (BA - Analyst Report), Lockheed Martin Corporation (LMT - Analyst Report) and Alliant Techsystems Inc. (ATK - Analyst Report), all with a Zacks Rank #2 (Buy).