Analyzing General Dynamics’ business segments
GD’s business segments
General Dynamics (GD), which forms almost 2% of holdings in the iShares Select Dividend ETF (DVY), has four major business segments: Aerospace Systems, Marine Systems, Combat Systems, and Information Systems and Technology. In this article, we’ll analyze General Dynamics’ business segments.
General Dynamic’s Aerospace Segment is the second-largest corporate jet manufacturer by revenue in the world. It designs and manufactures a range of mid- and large-cabin business jet aircraft. It also provides maintenance, refurbishment, outfitting, and other services for business-jet, narrow-bodied, and wide-bodied aircraft customers across the globe. Its service centers are located in more than 25 locations worldwide.
Aerospace is one of the company’s most profitable sectors. It’s known for its superior designing, safety, reliability, and technologically advanced cockpits and cabin systems. The company provides its aerospace services under two sub-groups: Gulfstream Aerospace and Jet Aviation. The segment is a particularly strong competitor to Boeing Company’s (BA) business jets division.
The company’s Combat System segment is a global leader in design, development, production, service support, and enhancement of tracked and wheeled military vehicles, advanced weapon systems, and munitions for the United States and its allies globally.
The segment has provided the US military with its most famous programs, including Stryker, M1 Abrams, and MRAP (Min-Resistant Ambush-Protected, Hydra-70 rockets). It also exports light armored vehicles for US allies around the world.
The segment is further divided in to three sub-groups: European Land Systems, Land Systems, and Ordnance and Tactical Systems. The Combat Systems segment is a strong competitor to Lockheed Martin’s (LMT) combat division.
General Dynamics’s Marine Systems segment designs, builds, and supports submarines and surface ships. The segment’s prime products for the US Navy include SSN 774 Virginia Class submarines, mobile landing program (or MLP) auxiliary support ships, and DDG 51 and DDG 1000 destroyers.
The majority of this segment’s workload supports the US. Navy. The segment also provides ship and submarine overhaul, repair, and lifecycle support services. It operates the only full-service maintenance and repair shipyard on the West Coast.
The company provides its marine services under the following subgroups: Bath Iron Works, Electric Boat, and NASSCO.
Information Systems and Technology
This segment provides a portfolio of services addressing the needs of various military, civilian, and commercial companies around the globe. The portfolio consists of product design, development, production, and support in secure mobile communication systems, information technology solutions, mission support services, ISR (intelligence, surveillance, and reconnaissance), naval control systems, and cyber security solutions.
This segment is the company’s second-most-profitable segment. It offers its services under the following sub-groups: Advanced Information Systems, C4 Systems, Information Technology, and United Kingdom Limited. Rockwell Collin’s (COL) Information Systems division is a strong competitor to this General Dynamics segment.
In addition to the company’s four business segments, the company also has a small resources group. It includes two businesses: a coal mining operation and an aggregates operation that mines sand, stone, and gravel for highway and building construction.
In the following article in this series, we’ll see how each of these segments performed in Q3 2014.