(Reuters) - U.S. weapons maker General Dynamics Corp (GD.N) on Wednesday reported higher-than-expected earnings and revenues for the first quarter, sending its shares up 4 percent.
General Dynamics, maker of Gulfstream business jets as well as ships, tanks and other military equipment, said net earnings rose 20 percent to $716 million, or $2.14 per share, from $595 million, or $1.71 per share, a year earlier. Revenues gained 7.1 percent to $7.78 billion from $7.26 billion.
Analysts polled by Thomson Reuters I/B/E/S looked for earnings per share of $1.94 on revenues of $7.42 billion.
Operating margins improved in three of its four business groups, rising to 13.2 percent companywide from 12 percent in the first quarter of 2014.
Chief Executive Officer Phebe Novakovic said a 20.4 percent margin posted in the aerospace sector would likely not be sustained over the full year.
General Dynamics did not revise its outlook for the full year, but Novakovic told analysts the company was ahead of its plan.
“We’re off to a very good start to the year, nicely ahead of our expectations,” she said. “We will work to consolidate our improvements and continue to outperform.”
Novakovic said about 5 cents of the 20-cent beat on earnings per share was due to a lower-than-projected tax rate of 29 percent for the quarter.
The company said the strong U.S. dollar depressed revenues and operating earnings by about $120 million and $20 million, respectively.
The funded backlog grew to $56 billion at the end of the first quarter from $53 billion at the end of last year, with the total backlog reaching $70.5 billion. It said it had $25.6 billion in additional unfunded contracts and options.
General Dynamics said it repurchased 4.56 million shares in the quarter, and planned to continue returning cash to shareholders through repurchases and dividends.
Novakovic said mergers and acquisitions were “not on my radar screen” because she was not seeing interesting new opportunities.
Revenues rose at three of the company’s four divisions, while operating earnings rose across the board, led by a 47 percent increase in earnings at the combat systems division.
General Dynamics’ shares rose $5.26 at $138.74 on the New York Stock Exchange.
Reporting by Andrea Shalal in Washington; Editing by Franklin Paul and Jeffrey Benkoe