DOW JONES NEWSWIRES
General Dynamics Corp.'s (GD) second-quarter profit slipped 3.6%
on a year-earlier gain as the aerospace and defense contractor saw
revenue growth across the company.
It also raised its full-year earnings outlook by a nickel to
$6.05 to $6.15 a share.
Defense companies, which are expected to weather the recession
better than most because governments consider their services
essential, have nonetheless been hurt by their exposure to the
commercial aviation and business-jet industries.
Societe Generale analyst Zafar Khan said Monday the company's
Gulfstream jet deliveries may not recover in the near future as
corporations defer non-essential spending, despite some indicators
pointing to a stabilization in business-jet activities.
The company posted income of $618 million, or $1.60 a share,
down from $641 million, or $1.60 a share, a year earlier. There
were 3.7% fewer shares outstanding in the most recent period. The
latest results included a 1-cent loss from discontinued operations,
while the prior year's included a 9-cent gain from a tax
benefit.
Revenue increased 11% to $8.1 billion.
Analysts surveyed by Thomson Reuters expected earnings of $1.57
on revenue of $8.13 billion.
Operating margin rose to 11.7% from 11%.
General Dynamics' largest business, information technology, saw
earnings decline 2.7% as revenue rose 3.5%. The aerospace segment
reported a 10% profit drop despite a 6.5% sales jump.
The company's funded backlog grew 5.3% to $47.7 billion.
General Dynamics said last month it would buy sensor and camera
maker Axsys Technologies Inc. (AXYS) for $643 million as it looks
to bulk up its intelligence offerings. Meanwhile, a federal appeals
court ruled last month the government was justified in canceling a
multibillion-dollar contract to build a new Navy stealth
fighter.
Shares closed Tuesday at $53.74 and haven't traded
premarket.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com