General Dynamics Raises Guidance as Cost Cuts Lift Earnings
27 July 2016 - 10:54PM
Dow Jones News
By Lisa Beilfuss
General Dynamics Corp. (GD) offered an upbeat outlook Wednesday,
as cost cuts offset a surprise decline in second-quarter revenue,
dragged by lower jet sales.
The Virginia-based aerospace and defense company sells
communication systems, ships and combat vehicles to the government,
in addition to Gulfstream business jets.
Solid demand of the high-end business jet has boosted the
company's results in recent years, providing a reliable source of
revenue even when the government has pulled in defense
spending.
In the second quarter, though, General Dynamic delivered fewer
Gulfstream jets. Aerospace sales slid 5.5% from a year earlier,
pacing a 2.8% overall revenue decline.
The company has worked to trim expenses to support profit, and a
3% drop in second-quarter costs and expenses helped counter the
sales decline and push earnings up slightly from a year
earlier.
Overall, General Dynamics reported a profit of $758 million, or
$2.44 a share, up from $752 million, or $2.27 a share, a year
earlier.
Revenue slipped 2.8% to $7.67 billion.
Analysts projected $2.31 in earnings per share and $7.87 billion
in revenue, according to Thomson Reuters.
For the full year, the company now expects to earn $9.70 a
share, up from previous guidance of $9.20 and above the $9.52
analysts have predicted.
General Dynamic shares, up 5.2% this year, were inactive during
premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
July 27, 2016 08:39 ET (12:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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