Aerospace and defense operator General Dynamics (GD) announced that its unit Electric Boat received a contract worth $400.6 million from the U.S. Navy to provide yard work, engineering and technical support for nuclear submarines.

As per the contract, General Dynamics’ unit will provide various services to the U.S. submarines and submersibles. The services will not only include design, engineering, material and logistic support for the submarines and submersibles but also involve technical support for submarine maintenance and modernization activities, training and facility support, all aimed to reduce the cost of operation.

Electric Boat will perform the support work in Groton, and facilities in Kings Bay, Georgia, Bangor, Washington, and in Quonset and Newport in Rhode Island. The work is scheduled to be completed by October 2011.

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. General Dynamics expects its Marine Systems to achieve operating margins growth in the high single digits due to a shift in the destroyer programs, which is likely to accelerate in the second half of the year.

In September 2010, Electric Boat was awarded a few contracts from the U.S Navy, namely a $11.7 million contract to provide submarine maintenance and repair work at Portsmouth Naval Shipyard in Maine and Puget Sound Naval Shipyard in Washington and a contract worth $17.9 million to provide support for submarine repair work on Los Angeles-class and Virginia-class submarines in Portsmouth, New Hampshire.

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 Company (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.

 
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