Aerospace and defense company General Dynamics Corporation (GD) announced that its General Dynamics Land Systems-Canada unit has been awarded a $35.5 million contract to produce 24 Light Armored Vehicles (LAV-A2) in various configurations for the United States Marine Corps.

The eight-wheeled amphibious vehicle, LAV-A2, is equipped with enhanced armor protection and an automatic fire-suppression system for crew protection, along with a robust suspension for mobility. Marine Air-Ground Task Force uses LAV-A2 for conducting its offensive as well as defensive operations.

Light Armored Vehicles have been a part of the Marine Corps’ operations since the 1980s with nearly 800 units presently in operation. The U.S. Marine Corps. has gradually upgraded to the higher version of Light Armored Vehicles, the LAV-A2, ordering 207 units of such vehicles since 2007.

The vehicles will be manufactured from the General Dynamics Land Systems-Canada’s plant in London, Ontario, and will be completed by April 2012. The deal was inked through the Canadian Commercial Corporation, an agency of the Canadian Government.

Since the conclusion of the second quarter 2010, General Dynamics has won quite a few new contracts, the most significant among these are the $278 million contract from the U.S. Army to produce Hydra-70 Rockets, Warheads and Motors, the $171.8 million contract from the U.S. Navy to provide lead-yard services for Virginia-class nuclear-powered attack submarines and a contract with the UK Ministry of Defense to deliver the Specialist Vehicle for the British Army.

The adjusted earnings of General Dynamics for the second quarter 2010 were $1.68 per share versus $1.61 at the end of second quarter 2009. The Zacks Consensus Estimates for the third quarter 2010, fiscal year 2010 and fiscal year 2011 are $1.64, $6.66 and $7.09 per share, respectively.

The company expects operating earnings for 2010 to range from $6.60 to $6.65 per share. We believe the consistent contract wins will enable General Dynamics to achieve this goal.

We presently have a Zacks #3 Rank (short-term ‘Hold’ recommendation) on shares.

 
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