IT, Shipbuilding Mean Profits For General Dynamics
Defense contractor General Dynamics said Wednesday that third quarter earnings were up 16 percent on higher sales in its shipbuilding unit and information technology business, topping Wall Street's earnings forecast.
The Falls Church-based company earned $634 million, or $1.59 per share, for the quarter, up from $546 million, or $1.34 per share, a year earlier. It had $7.14 billion in sales, a 4.5 percent increase from $6.83 billion a year ago.
Analysts polled by Thomson Reuters were expecting $1.51 per share in earnings on revenue of $7.37 billion.
The company saw sales growth in three of its four businesses, led by a nearly 13 percent jump -- to $1.4 billion -- in its marine division that makes warships for the Navy and submarines.
The company's information technology division was up nearly 5 percent to $2.5 billion, while the Gulfstream private jet unit saw sales rise about 4 percent to $1.37 billion.
However, sales in the combat systems division, which makes tanks, armored vehicles and other equipment, dipped slightly to $1.85 billion. General Dynamics has benefited greatly in recent quarters from Army and Marine Corps demand for heavily armored vehicles that can withstand roadside bomb blasts. But the program is in the process of winding down.
The company said it increased its backlog of orders to $60.5 billion in the quarter, from $55.3 billion at the end of the second quarter. Much of the growth came from equipment such as Stryker infantry combat vehicles, work on upgrading Abrams tanks and new orders for Gulfstream business jets.
The company did not provide any updated guidance Wednesday morning. It said in July it expected 2008 earnings of $6.00 to $6.05 per share. Analysts expect General Dynamics to earn $6.13 per share for the year on $29.7 billion in revenue.
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