General Dynamics Corporation (GD) was awarded a follow-on $60 million contract by the U.S. Air Force for providing network management and mission operations support to the 480th Intelligence Surveillance and Reconnaissance (ISR) Wing’s Air Force Distributed Common Ground System (DCGS) and two network operations centers in Virginia and California. The five-year contract was awarded to General Dynamics’ business unit, General Dynamics Advanced Information Systems.
 
Under this contract, General Dynamics will provide systems, network and communications engineering, technical project management, systems integration and administration, configuration management, and network security management. General Dynamics will also provide network management, mission and performance management and data traffic routing support for the DCGS network.
 
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 system and technology. The company operates through four business segments − Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace. Its major competitors 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 continue to deliver on 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 an increasing funded backlog and an improving balance sheet are additional positive factors.
 
General Dynamics is slated to release its fiscal 2009 numbers on January 27, 2010. The company expects its earning per share for fiscal 2009 to be in the range of $6.15 – $6.20. This is in line with the Zacks Consensus Estimate for the fiscal 2009. We maintain our market Neutral recommendation on the shares.
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