General Dynamics’ (GD) business unit, General Dynamics Information Technology, was awarded a $61.8 million task order to support the U.S. Army Intelligence and Security Command (INSCOM). Under the four-year contract, General Dynamics’ will provide uninterrupted information technology (IT) operations and maintenance support that INSCOM and its subordinate units require for creating and sharing globally critical intelligence products.
Work under the contract will be conducted at the headquarters in Fort Belvoir, Virginia; Fort Meade and Aberdeen Proving Ground, Maryland; Fort Sam Houston, Fort Bliss and Camp Bullis, Texas; Fort Huachuca, Arizona; Fort Bragg, North Carolina; and Fort Leavenworth, Kansas.
General Dynamics’ Information Technology business unit is part of the company’s Information Systems and Technology segment. It provides IT, systems engineering, professional services and simulation as well as training to customers in the defense, intelligence, homeland security, health, federal civilian government, state and local government and commercial sectors.
General Dynamics’ Information Systems and Technology segment’s fortunes in the second quarter of 2010 were boosted by higher volume on ruggedized and mobile computing programs, tactical communication contracts and higher volume of IT support programs for the intelligence community and Network-Centric Solutions (NETCENTS) program for providing network support to federal agencies. The company expects segmental revenue growth of approximately 8%–9% year over year in 2010.
General Dynamics, headquartered in Falls Church, Virginia is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. The company operates through four business segments − Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace. The major competitors of the company are Northrop Grumman Corporation (NOC), Lockheed Martin Corporation (LMT), Raytheon Company (RTN) and Force Protection Inc. (FRPT).
General Dynamics is a well-run company that is likely to keep up to the expectations driven by strong revenue growth, margin expansion and cash flow generation. Strong defense outlays should further improve the company’s outlook for shareholders while a rising funded backlog and an improving balance sheet are the additional positive factors.
We currently have a market Neutral recommendation and Zacks #3 Rank (Hold) on General Dynamics.