General Dynamics’ Electric Boat division announced a full‑rate production contract with L3Harris Technologies for 26 shipsets that will be installed on Virginia‑ and Columbia‑class submarines. The award, made on February 18, 2026, covers production through 2033 and is the largest full‑rate contract L3Harris has received to date.
The contract is a significant win for L3Harris. In the fourth quarter of 2025 the company reported revenue of $5.6 billion and a non‑GAAP EPS of $2.86, beating analyst expectations by $0.10. For 2026 L3Harris projects revenue of $23.0‑$23.5 billion and operating margins in the low‑16% range, underscoring the long‑term revenue visibility that the submarine shipset contract provides.
For General Dynamics, the contract adds to a strong Q4 2025 performance that saw revenue of $14.4 billion and diluted EPS of $4.17, both above consensus estimates. The Marine Systems segment, which delivered a 22% revenue increase and a 72% rise in operating profit in that quarter, benefits from the new order as it improves margin predictability and supports the company’s $118 billion backlog.
Strategically, the deal reinforces the partnership between Electric Boat and L3Harris, ensuring that the Navy’s submarine construction program has a reliable supplier of advanced communications and sensor systems. The long‑term nature of the contract also helps both companies manage supply‑chain challenges and allocate resources more efficiently.
Investors have responded positively to the announcement, citing the contract’s contribution to future revenue streams and the continued demand for U.S. Navy submarine construction. Analysts note the contract’s alignment with the Navy’s modernization priorities and the potential for margin improvement in General Dynamics’ Marine Systems segment.
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