Credit: Shutterstock photoGeneral Dynamics C4 Systems, a unit of General Dynamics Corp. ( GD ), won a contract from the U.S. Army worth $415 million to provide total acquisition life-cycle support to product managers, who operate within the Live Training Transformation Product Line Framework. The contract work is expected to be over by Feb 5, 2020. The contracting activity is the Army Program Executive Office for Simulation, Training and Instrumentation, Orlando, Florida.
General Dynamics C4 Systems, a part of the company's Information Systems and Technology ("IST") business segment, was combined with Advanced Information Systems in Jan 2015 to form General Dynamics Mission Systems. General Dynamics Mission Systems provides services in the field of cyber security, Intelligence, Surveillance and Reconnaissance ("ISR"), networking and satellite communication to the U.S. Department of Defense ("DoD"), intelligence, cyber and homeland security communities. In fact, it is one of the prime contractors for the U.S. Army's tactical network.
IST reported dismal sales in fourth-quarter 2014. Revenues declined 8.3% year over year. The segment even saw a decline in funded backlogs to $7.1 billion in the fourth quarter from $7.4 billion in the preceding quarter.
On account of rising security threats, focus of the defense budget funding has shifted toward upgrading existing capabilities and emphasizing on ISR, cyber security and space technology. This will definitely improve prospects for contract wins by the IST segment in the future and boost the company's top line.
General Dynamics currently has a Zacks Rank #3 (Hold). Better-ranked players in the defense space are Rockwell Collins Inc. ( COL ), Curtiss-Wright Corporation ( CW ) and Spirit AeroSystems Holdings, Inc. ( SPR ). While Spirit AeroSystems sports a Zacks Rank #1 (Strong Buy), Rockwell Collins and Curtiss-Wright each carry a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
