General Dynamics beats on profit, helped by business jets and marine
- Q3 net earnings $902 million or $3.26 per share
- Analysts on average had expected net earnings of $3.15/shr
Oct 26 (Reuters) - Gulfstream business jet maker General Dynamics Corp (GD.N) on Wednesday reported a third-quarter profit above analysts' estimates, fueled by strong demand for flying private and for products and services at its Marine Systems division.
The group benefited from demand for private jets in the United States and other regions, despite fears of a slowdown due to broader economic uncertainty.
"Only time will tell about the macroeconomic impact, but we continue to see strong interest in Gulfstream aircraft and services," General Dynamics Chief Executive Officer Phebe Novakovic told analysts.
She said Gulfstream expects deliveries of 40 or 41 aircraft during the last three months of 2022, having delivered 35 business jets in the past quarter, compared with 31 a year earlier.
Improving margins and a swelling backlog at Gulfstream helped the Virginia-based defense contractor to more than offset the effects of higher costs, supply chain constraints and labor shortages, which have weighed on manufacturing.
Novakovic acknowledged that "supply chain remains a potential challenge going forward," but did not see labor shortages as a constraint on revenue growth. In the third quarter the company's Mission Systems unit faced pressure from supply chain disruptions, inflation and labor disruptions.
The company also disclosed an order for its munitions business related to the war in Ukraine.
Net earnings in the quarter ended Oct. 2 were $902 million or $3.26 per share, compared with $860 million or $3.07 per share a year earlier.
Analysts on average had expected net earnings of $3.15 per share, based on Refinitiv data.
Sales at the Marine Systems unit, which manufactures nuclear-powered submarines, rose by 5% to $2.77 billion from $2.64 billion a year earlier, while overall revenue grew 4.3% to $9.98 billion.
The aerospace unit's sales increased by 13.6% to $2.35 billion from $2.07 billion a year earlier.
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