General Dynamics Unit Secures Follow-Up Contract From Navy

A General Dynamics (NYSE:GD) unit, Electric Boat Corp, has secured a follow-up contract from the U.S. Navy worth $116.2 million for the production of Virginia Payload Module and South Dakota Insertion sample materials to be used in Virginia Class Submarines.

Work is scheduled to be complete by Nov 2019 and a major part of it will be performed in Indiana and New York. The contract will use fiscal 2016 research and development funds.

General Dynamics has fostered a long-term association with the U.S. Department of Defense. It enjoys the reputation of providing quality product and services and ensures timeliness in the delivery of the same.

Last week, National Steel and Shipbuilding Co. (“NASSCO”), another affiliate of General Dynamics, received a contract from the U.S. Navy for the design and development of six oilers, the TAO-205 Class Fleet Replenishment Oilers, having a cumulative capacity to transport 156,000 barrels of oil.

The contract is valued at $3.2 billion, on the potential exercise of all options. The base value of the contract stands at $640 million for the construction of the first oiler and is expected to be followed by one ship per year from fiscal 2018 to fiscal 2022 as and when funds are allocated.

Most of the work will be performed in San Diego, CA and the fist ship is expected to be built by Jul 2020.

NASSCO is also providing design support to the Navy in the development of the warship LX(R).

Based in the San Diego industrial area, NASSCO has been designing and building ships since 1960. It focuses on designing and building supplementary and support ships for the U.S. Navy, as well as oil tankers and dry cargo carriers for the commercial markets. NASSCO also specializes in providing repair services for the Navy’s global force.

Zacks Rank

Currently General Dynamics carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Engility Holdings, Inc. (NYSE:EGL) , Huntington Ingalls Industries, Inc. (NYSE:HII) and Leidos Holdings, Inc. (NYSE:LDOS) , all carrying a Zacks Rank #2 (Buy).