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General Dynamics Corporation’s GD business unit, Electric Boat, recently clinched a contract involving USS Ohio Class submarines. The award has been offered by the Supervisor of Shipbuilding Conversion and Repair, Groton, CT.
Details of GD’s Deal
Valued at $29.9 million, the contract is expected to be completed by December 2026. Per the terms of the deal, General Dynamics will provide materials for the USS Ohio Class Drydock Seismic Stability System.
The work related to this deal will be executed in Vancouver, WA.
GD’s Growth Prospects
Rising military conflicts, terrorism and border disputes have driven nations to focus more on national security and investments in enhancing their submarine fleets. This surge is fueled by the increasing demand for advanced technologies like stealth capabilities, underwater surveillance and long-range strike systems, as well as the growing complexity of modern naval warfare.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 7.6% for the global submarine market during the 2025-2030 time period.
This is likely to benefit General Dynamics, a renowned manufacturer of submarines that provides planning yard support and associated solutions for these submarines. The company enjoys a steady stream of contracts for submarine manufacturing and associated services like the latest one. It is also responsible for all aspects of design and engineering and leads the construction of Columbia-class ballistic missiles and Virginia-class attack submarines.
At the end of the third quarter of 2024, General Dynamics witnessed a solid backlog of $92.63 billion.
Opportunities for Other Defense Players
Other defense companies that are likely to enjoy the perks of the expanding global submarine market have been discussed below:
Huntington Ingalls Industries HII: Through its Newport News Shipbuilding division, HII is involved in producing the Columbia-class and Virginia-class submarines, two key assets of the U.S. Navy. The company provides fleet services to its submarines around the world, offering modernization, repair and installation services.
Huntington has a long-term (three to five years) earnings growth rate of 7.4%. The Zacks Consensus Estimate for HII’s 2025 sales indicates year-over-year growth of 4%.
BAE Systems BAESY: It plays a vital role in the production of advanced submarines, particularly for the United Kingdom’s defense sector. BAE Systems is the primary manufacturer of the Astute-class nuclear submarines, which are integral to the Royal Navy's fleet.
BAE Systems has a long-term earnings growth rate of 11.1%. The Zacks Consensus Estimate for BAESY’s 2025 sales indicates year-over-year growth of 58.4%.
Northrop Grumman Corporation NOC: It is a renowned provider of missile launch systems for naval submarines. The company manufactures Launcher Subsystem hardware to support the Columbia and Dreadnought common missile compartment program.
Northrop has a long-term earnings growth rate of 19%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 3.6%.