General Dynamics profit rises 7.3per cent on higher Gulfstream deliveries

General Dynamics profit rises 7.3per cent on higher Gulfstream deliveries

Higher deliveries of Gulfstream jets boosted revenue at U.S. aerospace and defense company General Dynamics Corp , which reported a 7.3per cent rise in quarterly profit on Wednesday, but shares were flat in premarket trading after gaining 2.5per cent a day earlier.

FILE PHOTO: A mockup of the Gulfstream G700 is unveiled during a news conference at the National Bu
FILE PHOTO: A mockup of the Gulfstream G700 is unveiled during a news conference at the National Business Aviation Association (NBAA) exhibition in Las Vegas, Nevada, U.S. October 21, 2019. REUTERS/David Becker/File Photo

REUTERS: Higher deliveries of Gulfstream jets boosted revenue at U.S. aerospace and defense company General Dynamics Corp , which reported a 7.3per cent rise in quarterly profit on Wednesday, but shares were flat in premarket trading after gaining 2.5per cent a day earlier.

Revenue from its aerospace unit jumped 23per cent to US$2.5 billion in the third quarter ended Sept. 29, as new Gulfstream deliveries, a key metric for investors, increased to 38, from 27 a year earlier.

The company delivered some of its first G600 jets to customers in August.

Net earnings climbed to US$913 million, or US$3.14 per share, in the quarter, from US$851 million, or US$2.85 per share, a year earlier. Wall Street analysts estimated earnings per share of US$3.06, according to Refinitiv data.

Revenue rose 7.3per cent to US$9.76 billion.

On Monday, General Dynamic's Gulfstream division unveiled its widely expected G700 long-range jet, in a challenge to Bombardier Inc's flagship Global 7500 aircraft.

Profit margins at the aerospace unit fell nearly three percentage points to 15.8per cent from 18.5per cent in the same quarter last year as the company invested in G600 and G700 jet production.

Operating earnings from the Marine Systems unit, which makes ships and submarines for the U.S. Navy, rose to US$209 million, a 24per cent increase compared to the same quarter a year ago.

Combat systems, which makes tanks, saw its revenue go up 14per cent from last year to US$1.7 billion. In July, the U.S. State Department approved the possible sale to Taiwan of 108 of General Dynamics' M1A2T Abrams tanks, angering China.

Also in July, General Dynamics won a US$2 billion contract to continue supporting global security, engineering and supply chain missions for the U.S. Department of State.

Total backlog at the end of third quarter 2019 was US$67.4 billion, compared with US$67.7 billion at the end of the second quarter.

(Reporting by Mike Stone in Washington, D.C. and Dominic Roshan K.L. in Bengaluru; Editing by Steve Orlofsky and Bernadette Baum)

Source: Reuters

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