Aerospace and defense operator General Dynamics (GD) announced that its unit Electric Boat received an order worth $7.3 million from the U.S. Navy to procure long-lead-time materials and machining for Ohio-class submarines.
This new order is a part of the original contract awarded by the U.S. Navy, on October 2010, for the procurement of long-lead-time materials for nuclear submarines. If the parties utilize all the options of the contract, the total value of the contract will reach $1.2 billion over three years.
Electric Boat is a part of General Dynamics’ Marine Systems and is involved in the design, construction and lifecycle support of submarines for the U.S. Navy. Marine Systems completed the third quarter with a backlog of $20.6 billion out of which $7.9 billion was funded backlog.
The company expects operating margins at Marine Systems in the fourth quarter of 2010 to be similar to that of the sequentially preceding quarter. General Dynamics expects this division to deliver an improvement in margins in a couple of years as the surface combatant fixed-price work builds, commercial ship building opportunities materialize and construction of two Virginia submarines per year is realized.
During the third quarter earnings call, General Dynamics raised its full-year operating earnings for 2010 to the range of $6.70 to $6.75 per share from $6.60 to $6.65 per share, taking into consideration the robust performance during the third quarter.
The Zacks Consensus Estimates for fourth-quarter 2010, fiscal year 2010 and fiscal year 2011 are $1.85 per share, $6.76 per share and $7.08 per share, respectively.
General Dynamics currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain a Neutral rating on the stock. The company’s net income margin outdid its major peers Boeing Co. (BA), Lockheed Martin Corporation (LMT) and Textron Inc. (TXT) in the trailing twelve months.
Based in Falls Church, Virginia, General Dynamics, with its units, operates in business aviation, land and expeditionary combat systems, armaments and munitions, shipbuilding and marine systems, and information systems and technologies.
GENL DYNAMICS (GD): Free Stock Analysis Report
Zacks Investment Research
