Defense Stock Roundup: GD Wins Big Deal, CW Boosts Buyback Program
Zacks Investment Research | Dec 05, 2019 07:40AM ET
U.S. defense stocks witnessed a moderate flow of funds from the Pentagon over the trailing five trading sessions. While this had sufficient potential to keep the aerospace and defense industry buoyant, turmoil in the broader market was a spoiler. On Dec 3, U.S. stocks declined with major market indices sliding downward,after President Trump hinted at a delay in trade talk with China.
Although latest media reports suggesting a possible U.S.-China trade talk resumption cheered the Wall Street on Dec 4, the overall market’s performance over the past five trading sessions has been disappointing. Consequently, major indices of the aerospace and defense industry put up a dismal show. Notably, the S&P 500 Aerospace &Defense (Industry) Index fell 3.7%, while the Dow Jones U.S. Aerospace & DefenseIndex slipped 3.2% in the past five trading sessions.
Among past week’s highlights, defense majors namely General Dynamics Corp. (NYSE:GD) , Lockheed Martin Corp. (NYSE:LMT) and Bell-Boeing —a joint venture (JV) between Boeing (NYSE:BA) and Bell Helicopter — a unit of Textron Inc. (NYSE:TXT) , secured a number of notable deals from the Department of Defense’s daily funding session. Meanwhile, Curtiss-Wright (NYSE:CW) announced improved share repurchase program and an acquisition deal.
Recap of Past Week’s Important Stories
1. General Dynamics’ Electric Boat division clinched a $22.2-billion multi-year modification contract for manufacturing nine Virginia-class submarines, of which, eight would include the Virginia Payload Module (VPM). The deal has been awarded by the Naval Sea Systems Command, Washington, D.C.
The modification also includes design support, delivery of spare materials and tests required for each submarine.Work related to the deal is expected to be completed by August 2029 (read more: Zacks Investment Research
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