x
Breaking News
0

General Dynamics Clinches A New $106M Contract For ESB 5

By Zacks Investment ResearchStock MarketsOct 04, 2016 03:11AM ET
www.investing.com/analysis/general-dynamics-clinches-a-new-$106m-contract-for-esb-5-200157057
General Dynamics Clinches A New $106M Contract For ESB 5
By Zacks Investment Research   |  Oct 04, 2016 03:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Defense behemoth General Dynamics Corp.‘s (NYSE:GD) National Steel and Shipbuilding Co. (NASSCO) business division secured a modification contract from the U.S. Navy. The deal aims at procuring additional long lead time material, engineering and non-production support for the Expeditionary Mobile Base 5 (ESB 5). The original contract was awarded in Jun 2016.

Notably, Expeditionary Mobile Base (ESB), formerly known as the Mobile Landing Platform (MLP) or Afloat Forward Staging Base (AFSB), is a highly flexible ship that offers logistics movement from sea to shore, supporting a broad range of military operations.

Details of the Deal

Valued at $106.2 million, the contract was awarded by the Naval Sea Systems Command, Washington, D.C. The majority of the work related to this deal will be executed in Crozet, VA; San Diego, CA; Iron Mountain (NYSE:IRM), MI and many other locations across the U.S. The deal will utilize fiscal 2016 and conversion (Navy) funds, while the work is expected to be over by Mar 2017.

Per the terms of the agreement, NASSCO will procure whole ship sets including interior outfittings; steel plates; hull and piping, ventilation and machinery insulation; heating, ventilation and air conditioning; emergency switchboards; piping; valves; steel shapes; ballast water treatment system; Aqueous Film Forming Foam system; and knuckle-boom crane.

ESB & NASSCO

ESB ships operate as mobile sea bases, providing the Navy Fleet with a critical access infrastructure that supports the flexible deployment of forces and supplies, whenever necessary. Interestingly, the commercial designing of ESB class of ships are based on the Alaska class crude oil carrier, also built by General Dynamics’ NASSCO.

In Jun 2015, General Dynamics delivered the Navy’s first Expeditionary Mobile Base – USNS Lewis B. Puller (ESB 3) – as part of the original MLP program. ESB 3 can accommodate 250 personel and has been designed to support MH-53 and MH-60 helicopters. NASSCO is currently constructing the second ESB, i.e. ESB 4 and is under contract to build a third, i.e. ESB 5. Construction for ESB 5 – the latest model in this fleet of ships – will be complete by 2017.

Our View

Currently, the ESB constitutes the centerpiece of the U.S. Navy’s forward-deployed airborne mine countermeasures mission (AMCM). It aims at facilitating the operations and maintenance of airborne mine countermeasures detachment personnel and equipment.

Being one of the only two contractors in the world equipped to build nuclear-powered submarines, General Dynamics already enjoys a dominant position over its peers in the U.S. Navy. Added to that, its sole privilege to win contracts related to the U.S. government’s AMCM further boosts its business in the shipbuilding and marine systems space. Going forward, management has raised the company’s 2016 outlook for its Marine business segment by $100-$200 million, to which we believe the recent modification contract will contribute noticeably.

Zacks Rank & Other Stocks to Consider

General Dynamics currently carries a Zacks Rank # 2 (Buy). A few better-ranked stocks in the aerospace and defense sector include Engility Holdings, Inc. (NYSE:EGL) , AAR Corp. (NYSE:AIR) and Leidos Holdings, Inc. (NYSE:LDOS) .

Engility sports a Zacks Rank #1 (Strong Buy) and has witnessed a 3.29% rise in its last 1 month’s stock price. This company’s current year consensus estimate improved 12.7% in last 60 days.

AAR Corp sports a Zacks Rank #1 and has witnessed a 8.37% surge in its last 1 month’s stock price. This company’s current year consensus estimate improved 5% in last 30 days.

Leidos sports a Zacks Rank #1 and has witnessed a 1.52% rise in its last 1 month’s stock price. Over the trailing 4 quarters, this company witnessed a positive earnings surprise of 7.93% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>



GENL DYNAMICS (GD): Free Stock Analysis Report

AAR CORP (AIR): Free Stock Analysis Report

ENGILITY HLDGS (EGL): Free Stock Analysis Report

LEIDOS HOLDINGS (LDOS): Free Stock Analysis Report

Original post

Zacks Investment Research
General Dynamics Clinches A New $106M Contract For ESB 5
 
General Dynamics Clinches A New $106M Contract For ESB 5

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email