The U.S. has decided to send Ukraine 31 advanced Abrams tanks.
Mateusz Slodkowski/AFP via Getty Images
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As the Ukraine-Russia war continues, the U.S. has decided to send 31 advanced Abrams tanks to Ukraine. That military staple comes from American aerospace and defense giant
General Dynamics
,
which reported slightly better sales and earnings than expected on Wednesday morning.
The Wall Street Journal reported Tuesday that the Biden administration was poised to send a “significant number of Abrams M1 tanks” to Ukraine—adding to the cash, missile launchers, munitions, and other equipment the U.S. has made available. The decision to supply tanks came down on Wednesday.
An Abrams tank weighs about 60 tons and is powered by a 1,500 horsepower gas turbine engine. The cannon has a diameter of almost 5 inches.
General Dynamics
reports Abrams sales in its combat systems segment, which generated about $7.3 billion in sales in 2022, flat with 2021 sales. Total sales at the company in 2022 hit $39.4 billion, up from $38.5 billion in 2021.
The company has also provided munitions for the Ukraine war effort.
Shares were up in premarket trading, but are now down 3% in midday trading. The
S&P 500
and
Dow Jones Industrial Average
are off 0.5% and 0.3%, respectively.
While part of the early gain in the stock might have the tank, it was more likely because of solid fourth-quarter earnings. General Dynamics said it earned $3.58 a share from sales of $10.9 billion. Wall Street was looking for $3.54 a share from $10.7 billion in sales.
Orders in the company’s aerospace division, which makes Gulf Stream business jets, exceeded sales by about 20%. Aerospace and the marine systems operation, which makes submarines, are the company’s largest business segments.
The company “ended the year in good shape, particularly with regards to its bookings,” wrote Vertical Research Partners analyst Rob Stallard in a Wednesday report. “The Aerospace division has yet to see bizjet demand slow down, and ended 2022 with a backlog of $19.5 billion…which is more than two times its 2022 revenues.”
He rates shares Buy and has a $300 price target for the stock. Shares closed Tuesday at $235.45.
Overall, 67% of analysts covering General Dynamics rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%. The average analyst price target is about $278 a share.
Other things might be moving the stock, but the tank did come up on the company’s conference call with CEO Phebe Novakovic assuring investors that her company can meet increasing demand for the Abrams.
Write to Al Root at allen.root@dowjones.com
