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General Dynamics (GD) Clinches $126M Deal for Rescue 21


Defense behemoth General Dynamics Corporation GD recently announced that its business unit – General Dynamics Mission Systems – has secured a follow-on contract to serve the U.S. Coast Guard. The primary purpose of the deal is to offer program management and system support for Rescue 21, the Coast Guard's advanced command, control and direction-finding communications system.

Details of the Deal

Valued at $125.6 million, this 36-month contract consists of a base period with three option periods from Sep 2016 through Aug 2019. Under the terms of the agreement, the company will also provide maintenance and sustainment engineering support for the Coast Guard Command, Control, and Communications Engineering Center.

Further, the Mission Systems unit will continue to provide customer care, field support and engineering escalation resources, as well as support for information assurance, spare parts and obsolescence management, and pursue life-cycle cost savings.

Rescue 21 & General Dynamics

Rescue 21 is one of General Dynamics' state-of-the-art communications network systems that enables the Coast Guard to execute its search and rescue (SAR) activities with greater agility and efficiency. Rescue 21 is operational across the entire Atlantic, Pacific and Gulf coasts of the continental U.S. as well as the shores of the Great Lakes, Puerto Rico, U.S. Virgin Islands, Hawaii, Guam and Mariana Islands.

Since its implementation, the Coast Guard has supported more than 90,000 SAR cases using Rescue 21. Through the latest contract, General Dynamics aims at offering superior program management to improve Rescue 21 mission readiness further.

Our View

For more than 50 years, General Dynamics has been developing and deploying mission critical communications networks that connect and deliver vital information for military, homeland security and public safety professionals.

Given that the coastal regions of the U.S. are prone to frequent cyclones, like the massive Hurricane Matthew that affected Florida recently, SAR activities are crucial for saving lives. With the availability of superior services related to the activities, as is promised by this deal, other coast guard troops will be encouraged to utilize the advanced networks of General Dynamics, going forward.

Zacks Rank & Stocks to Consider

General Dynamics currently carries a Zacks Rank #2 (Buy). Some other favorably placed stocks in the aerospace and defense sector include AAR Corp. AIR, Engility Holdings, Inc. EGL and Leidos Holdings, Inc. LDOS.

AAR Corp. sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has witnessed a 12.5% surge in its stock price in the last one month. This company’s current year consensus estimates improved 5% over the last 30 days.

Engility also sports a Zacks Rank #1 and has witnessed a 4% rise in its stock price in the last one month. The company’s current year consensus estimate improved 13.6% in the last 60 days.

Leidos holds a Zacks Rank #2 and has witnessed a 0.8% rise in its stock price in the last one month. The company’s current year consensus estimate improved 8.4% in the last 60 days.

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