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General Dynamics (GD) Wins Deal for Littoral Combat Ship
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General Dynamics Corp.’s (GD - Free Report) Mission Systems business unit recently clinched a modification contract involving Littoral Combat Ship (LCS). The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $48.3 million, the contract is expected to be completed by August 2024. Per the terms of the deal, General Dynamics will provide sustainment of the LCS Integrated Combat Management System and associated combat system elements.
Majority of the work related to this deal will be carried out in Pittsfield, MA.
General Dynamics & LCS
LCS ships play a critical role in defending a nation, with these being designed to be agile, mission-focused platforms capable in operating in near-shore and open-ocean environments.
The importance of General Dynamics in this space lies in the fact that the core mission system of the U.S. Navy's Independence-variant LCS is built on General Dynamics' computing infrastructure. Notably, GD’s computing technology controls everything from driving the ship to firing its guns. It is designed to maximize automation, enabling sailors to focus on their missions.
The company is the lead integrator for the Independence-variant LCS systems, responsible for the design, integration and testing of the navigation, command, control, computing and aviation systems on each ship.
Growth Prospects
In a bid to safeguard their borders from hostile attacks amid worldwide geopolitical instability, nations have been rapidly increasing their defense spending. Investments on sea warfare capabilities for both defense and offensive proposes have significantly gained traction.
Looking ahead, per a report from the Mordor Intelligence firm, the global naval combat systems market is projected to witness a CAGR of more than 2.5% during 2023-2028.
With LCS serving as one of the key weapon systems to defend a nation’s sea, the aforementioned market’s growth prospect is likely to usher in more notable defense contracts for General Dynamics in the coming days, like the latest one. Such awards should boost GD’s future revenue growth.
Opportunities for Peers
Other prominent defense majors that are likely to enjoy the perks of the expanding naval combat systems market are Mitsubishi Heavy Industries (MHVYF - Free Report) , Lockheed Martin (LMT - Free Report) and Huntington Ingalls Industries (HII - Free Report) . Mitsubishi Heavy Industries manufactures naval surface ships and submarines. The company also provides after-sales services for destroyers and submarines.
The Zacks Consensus Estimate for MHVYF’s fiscal 2023 earnings reflects an improvement of 44.6% from the 2022 reported figure. Shares of Mitsubishi Heavy Industries rallied 56.8% in the past year.
Lockheed Martin designs surface combatant ships for the U.S. Navy and international customers that can operate in shallow waters and the open ocean. Its Freedom-variant LCS is a resilient, flexible warship, designed from the keel up to affordably take on new capabilities including advanced sensors, missiles and cutting-edge cyber systems.
LMT boasts a long-term earnings growth rate of 6.5%. Shares of LMT rallied 7.3% in the past year.
Huntington Ingalls is known for specializing in manufacturing amphibious assault and expeditionary ships, and provides more than 70% of ships for the U.S. Navy.
The consensus estimate for HII’s 2023 sales reflects an improvement of 3.5% from the 2022 reported figure. The company boasts a four-quarter average earnings surprise of 1.76%.
Price Movement
In the past year, shares of General Dynamics have risen 0.8% against the industry’s 2.1% decline.
Image: Bigstock
General Dynamics (GD) Wins Deal for Littoral Combat Ship
General Dynamics Corp.’s (GD - Free Report) Mission Systems business unit recently clinched a modification contract involving Littoral Combat Ship (LCS). The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $48.3 million, the contract is expected to be completed by August 2024. Per the terms of the deal, General Dynamics will provide sustainment of the LCS Integrated Combat Management System and associated combat system elements.
Majority of the work related to this deal will be carried out in Pittsfield, MA.
General Dynamics & LCS
LCS ships play a critical role in defending a nation, with these being designed to be agile, mission-focused platforms capable in operating in near-shore and open-ocean environments.
The importance of General Dynamics in this space lies in the fact that the core mission system of the U.S. Navy's Independence-variant LCS is built on General Dynamics' computing infrastructure. Notably, GD’s computing technology controls everything from driving the ship to firing its guns. It is designed to maximize automation, enabling sailors to focus on their missions.
The company is the lead integrator for the Independence-variant LCS systems, responsible for the design, integration and testing of the navigation, command, control, computing and aviation systems on each ship.
Growth Prospects
In a bid to safeguard their borders from hostile attacks amid worldwide geopolitical instability, nations have been rapidly increasing their defense spending. Investments on sea warfare capabilities for both defense and offensive proposes have significantly gained traction.
Looking ahead, per a report from the Mordor Intelligence firm, the global naval combat systems market is projected to witness a CAGR of more than 2.5% during 2023-2028.
With LCS serving as one of the key weapon systems to defend a nation’s sea, the aforementioned market’s growth prospect is likely to usher in more notable defense contracts for General Dynamics in the coming days, like the latest one. Such awards should boost GD’s future revenue growth.
Opportunities for Peers
Other prominent defense majors that are likely to enjoy the perks of the expanding naval combat systems market are Mitsubishi Heavy Industries (MHVYF - Free Report) , Lockheed Martin (LMT - Free Report) and Huntington Ingalls Industries (HII - Free Report) .
Mitsubishi Heavy Industries manufactures naval surface ships and submarines. The company also provides after-sales services for destroyers and submarines.
The Zacks Consensus Estimate for MHVYF’s fiscal 2023 earnings reflects an improvement of 44.6% from the 2022 reported figure. Shares of Mitsubishi Heavy Industries rallied 56.8% in the past year.
Lockheed Martin designs surface combatant ships for the U.S. Navy and international customers that can operate in shallow waters and the open ocean. Its Freedom-variant LCS is a resilient, flexible warship, designed from the keel up to affordably take on new capabilities including advanced sensors, missiles and cutting-edge cyber systems.
LMT boasts a long-term earnings growth rate of 6.5%. Shares of LMT rallied 7.3% in the past year.
Huntington Ingalls is known for specializing in manufacturing amphibious assault and expeditionary ships, and provides more than 70% of ships for the U.S. Navy.
The consensus estimate for HII’s 2023 sales reflects an improvement of 3.5% from the 2022 reported figure. The company boasts a four-quarter average earnings surprise of 1.76%.
Price Movement
In the past year, shares of General Dynamics have risen 0.8% against the industry’s 2.1% decline.
Image Source: Zacks Investment Research
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.