General Dynamics Electric Boat Wins $234.2M Navy Contract
General Dynamics Corporation (GD) unit Electric Boat received a contract worth $234.2 million from the U.S. Navy, for support for of active nuclear submarines.
Under this cost-plus-fixed-fee contract, General Dynamics will act as the design agent and planning yard, as well as render engineering and technical support for active nuclear submarines. The contract has options which if exercised could extend the total contract value to $1.5 billion.
Most of the work, roughly 73%, under this contract will be done in Groton, CT while the remaining in Bangor, WA (9%); Norfolk, VA (6%); Newport, RI (4%); Quonset, RI (3%); Kings Bay, GA (3%); and Pearl Harbor, HI (2%).
The contract is slated for completion by Sep 30, 2015 and the Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity.
General Dynamics is one of the largest U.S. defense contractors whose revenue exposure is spread over a broad portfolio of products and services that help it to keep the overall growth momentum steady. The company is one of the two contractors equipped to build nuclear-powered submarines in the U.S.
General Dynamics gets awards from the U.S. Navy fairly regularly. On Apr 2014, General Dynamics Electric Boat Corp. received a contract to build 10 additional Virginia class submarines for the U.S. Navy. Per the $17.6 billion contract, the company will deliver two submarines per year over five years.
This multi-billion dollar contract was undoubtedly a welcome sign for General Dynamics given the austere U.S. defense budget environment. In Mar 2014, Bath Iron Works, another unit of General Dynamics, received a $643 million contract from the U.S. Navy to construct an additional Arleigh Burke-class destroyer.
General Dynamics, holding a Zacks Rank #2 (Buy), has performed consistently over the past few quarters. The company was able to surpass the Zacks Consensus Estimate in the last four quarters with an average beat of 5.46%.
Some other well-ranked stocks in the aerospace and defense industry include The Boeing Company (BA), Lockheed Martin Corp. (LMT) and Air Industries Group (AIRI). Air Industries holds a Zacks Rank #1 (Strong Buy), Boeing and Lockheed carry a Zacks Rank #2 (Buy).
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