By Chelsey Dulaney
General Dynamics Corp. on Wednesday boosted its earnings outlook
for the year as the aerospace and defense company's revenue and
earnings easily topped expectations in its second quarter.
For the year, General Dynamics now expects earnings from
continuing operations of $8.70 to $8.80 a share, up sharply from
its prior guidance of $8.05 to $8.10 a share.
Shares added 2.2% in premarket trading.
The U.S. Department of Defense is General Dynamics' biggest
customer, and a more stable defense budget has benefited suppliers
like General Dynamics and larger defense contractor Lockheed Martin
Corp.
General Dynamics' business jet unit has seen strong sales in the
first part of the year, with U.S. and Middle East business
particularly active, the head of the Gulfstream unit said in
May.
Overall, for the latest period, General Dynamics posted a profit
of $752 million, or $2.27 a share, up from $541 million, or $1.58
share, a year earlier. Revenue grew 5.5% to $7.88 billion.
Analysts had projected $2.06 in per-share earnings and $7.68
billion in revenue.
Sales in the aerospace unit, which represents over a quarter of
the company's top line, grew 13% to $2.26 billion as it delivered
36 Gulfstream aircrafts in the quarter.
General Dynamics' combat systems segment, which makes vehicles
and weapons systems for the U.S. government and its allies,
reported a 3.9% decrease in revenue to $1.41 billion. The segment
represents about 18% of overall sales.
The company said sales in its information systems and technology
business increased 2.4% to $2.22 billion, while marine systems
revenue grew 8.1% to $2 billion.
Earlier this month, peer Lockheed Martin Corp. boosted its
full-year guidance after reporting higher revenue and profit for
the second quarter. Lockheed also agreed to buy helicopter maker
Sikorsky Aircraft for $9 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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