General Dynamics Corp. (GD)

[Jerry70]

$ GD. Lockheed Martin Floats a New Boat
The Navy's new Littoral Combat Ships are small, fast and extremely mission-flexible. They're also likely to be quite profitable for the companies building them.

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LOCKHEED MARTIN BUILT AMERICA'S FIRST LITTORAL COMBAT SHIP, THE USS FREEDOM -- AND ITS LATEST LCS, TOO. IMAGE SOURCE: LOCKHEED MARTIN.

According to Pentagon planning, the U.S. Navy will buy a total of 32 Littoral Combat Ships (LCS) from contractors Lockheed Martin (NYSE: LMT) and Austal (NASDAQOTH: AUTLY) through about 2019. Pentagon estimates put the cost of each "seaframe" at about $479 million in fiscal 2016. Including inflation over the course of the program, the total cost of all 32 vessels is estimated at $21.8 billion. "Mission Packages" (guns, missiles, sensors) will add $7.2 billion to the ships' cost, for a total program cost of perhaps $29 billion.

About half these ships will be built by Austal and its subcontractor, General Dynamics (NYSE: GD). The other half will come from Lockheed Martin and its partners, which include shipbuilder Marinette Marine. Progress, however, has been slow. Lockheed's third LCS, christened the USS Milwaukee (LCS 5) was commissioned into service just this week.