General Dynamics Ordnance and Tactical Systems, a unit of General Dynamics Corp. (GD), has received an ammunition order from the U.S. Army Sustainment Command in Rock Island, Illinois. The ammunition order forms a major part of the third option on a previously awarded multi-year contract.
Under the contract, General Dynamics will produce 20mm PGU-27A/B Training Practice (TP), the PGU-30A/B Training Practice with Tracer (TP-T) and the PGU-28A/B Semi-Armor Piercing High Explosive Incendiary tactical round for the U.S. Army.
Simultaneously, General Dynamics also won a contract to produce and deliver 0mm PGU-28A/B combat ammunition for an international customer. This contract is a significant win for General Dynamics as it highlights the growing market for the company’s medium-caliber business.
General Dynamics plans to perform work under both contracts at its Marion, Illinois, facility. Both the contracts together are valued at around $64 million.
General Dynamics’ PGU ammunition family is compatible with the 20mm x 102mm gun system and was developed for the Navy by General Dynamics as a replacement for the M50 ammunition series. These ammunition rounds are used in training and combat by the U.S. Air Force and Navy fixed-wing aircraft, including F-14, F-15, F-16 and F/A-18 fighters and the U.S. Marine Corps AH-1 Cobra attack helicopter.
The PGU-27 and PGU-30 are highly reliable and cost-effective 20mm target practice solutions and are ballistically matched to the PGU-28A/B. The tactical PGU-28 A/B SAPHEI is a semi-armor piercing, high-explosive incendiary multi-purpose round with a pyrotechnic delay fuze.
General Dynamics’ long-standing and exclusive licensing agreement with Nammo for the 20mm multi-purpose technology was the foundation for the development of PGU family. General Dynamics and Nammo have a long and successful relationship in producing and supplying medium caliber ammunition world-wide.
Today, General Dynamics is the only licensed producer of the 20mm PGU family that can sell all three rounds internationally.
Defense and aerospace operator General Dynamics Corporation announced third-quarter 2011 operating earnings of $1.83 per share, which surpassed the Zacks Consensus Estimate of $1.77. Results of the company’s closest peer Lockheed Martin Corporation (LMT) came in at $1.99 per share, also above the Zacks Consensus Estimate of $1.81.
Headquartered in Falls Church, Virginia, General Dynamics engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation.
The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
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