General Dynamics (GD: 65.66 -0.63 -0.95%) stated that its operating unit, C4 Systems, was awarded a contract by the NASA. The Space Network Ground Segment Sustainment contract is worth $642.2 million and will begin from June 21, 2010, and continue through June 20, 2017.The Space Network Ground Segment is part of NASA’s Space Network. The Space Segment comprises NASA’s Tracking and Data Relay Satellites (TDRS). The network provides the resources for global space-to-ground telecommunications and tracking coverage for low Earth orbit and near-Earth robotic and human spaceflight missions.
As per the Space Network Ground Segment Sustainment contract, General Dynamics will replace the obsolete systems, modernize Ground Segment to enable the Space Network to continue to deliver high quality services, simplify the integration process of NASA’s Space Communications and Navigation networks, implement new methods and capabilities for using TDRS to support Space Network user spacecraft, and significantly reduce the use of resources required for operations and maintenance.
General Dynamics will also work to improve and expand the methods for Space Network user control centers and also ensure reliability and the long-term operational performance of the centers.
Based in Scottsdale, Arizona, General Dynamics C4 Systems is an operating unit of General Dynamics. C4 Systems focuses on the development, design, manufacturing and integration of secure communication, information and technology solutions.
Despite winning new contracts, like the NASA deal, the future prospect of General Dynamics, to a large extent depends upon defense spending. The U.S defense department expressed its intention to cut down on defense spending and save $100 billion over the next five years. Given General Dynamic’s dependence on U.S defense budget, a bleak scenario for mid-sized cabin jets and risks related to execution of key projects, we maintain a “Neutral” rating on the stock. The major competitors of the company are Boeing Co. (BA: 66.0799 -0.9501 -1.42%),Lockheed Martin Corporation (LMT: 80.175 -1.025 -1.26%) and Textron Inc.(TXT: 19.68 -0.34 -1.70%).
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