General Dynamics swings to profit in fourth quarter
THE TAKE: Defense contractor General Dynamics reported earnings of $495 million, or $1.40 per share, in the fourth quarter, up from a $2.1 billion loss, or $6.07 per share, in the same quarter last year. The company, facing reduced federal spending, beat analysts’ estimates for revenues. The Falls Church-based defense contractor had $8.1 in revenues during the year, compared with $7.99 billion predicted by analysts polled by Yahoo! Finance.
The company’s 2012 fourth quarter results included a $2 billion charge in the value of its information systems and technology division.
General Dynamics' aerospace and information systems and technology divisions reported an increase in revenue during the fourth quarter, while revenue in its combat systems and marine systems fell.
The combat systems group had lower revenue than expected because of sequestration and a major international order that has been held up in negotiations, General Dynamics' CEO Phebe Novakovic said during a conference call with analysts, according to the Washington Business Journal.
Revenue: Total revenue during the quarter rose 0.4 percent to $8.1 billion. Revenue was up 14.7 percent to $2.1 billion for its aerospace division and up 4.4 percent to $2.7 billion for its information systems and technology division. Revenue fell 16.4 percent to $1.65 billion, while revenue fell 2 percent to $1.63 billion during the quarter.
For the year, revenue fell 0.9 percent to $31.2 billion.
Earnings: Fourth-quarter profit was $495 million, or $1.40 per diluted share, compared with a loss of $2.1 billion, or $6.07 per diluted share, during the fourth quarter of 2012. Last year’s fourth quarter included a one-time charge of around $2 billion.
For 2013, net earnings were $2.4 billion, or $6.67 per diluted share, compared with a loss of $332 million, or 94 cents per diluted share,, in 2012.
THE COMPANY’S TAKE:
“General Dynamics performed well in 2013, reflecting our continued focus on operations, cost management, cash generation and our commitment to meeting our customers' requirements,” Chairman and CEO Phebe N. Novakovic said in a statement. “As promised, we managed our company prudently, adjusting our business to reflect the realities of the current defense spending environment and retiring risk throughout the organization.”