General Dynamics Corporation(GD) received a $165 million contract from the German Federal Office of Defense Technology and Procurement for the delivery of 195 highly protected EAGLE vehicles. The contract will boost the order book of the Combat Systems segment of the company.
General Dynamics’ Combat Systems business segment witnessed 13.6% decline in revenues in the first nine months of 2010 on being compared year over year. This was due to lower volumes in the Abrams main battle tank and Stryker wheeled combat vehicle programs.
Total backlog of General Dynamics at the end of the first nine months of 2010 was $61.83 billion, which slipped 6.7% from $66.3 million reported in the year-ago period. Going forward, the company will be testing its expertise with new contracts like the Stryker wheeled armored vehicle program, agreement with NASA to modernize the ground segment of the satellite communications network, a deal with the U.S. Navy for supplying long-lead materials, and advanced design efforts for the Mobile Landing Platform program.
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), Raytheon Company (RTN) and Force Protection Inc. (FRPT).
General Dynamics currently estimates full-year 2010 operating earnings in the range of $6.70 to $6.75 per share, taking into consideration the robust performance during the third quarter. The Zacks Consensus Estimates for fourth-quarter 2010, fiscal year 2010 and 2011 are $1.85 per share, $6.76 per share and $7.09 per share, respectively.
General Dynamics currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain our ‘Neutral’ recommendation on the stock.
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