General Dynamics Corp. (NYSE: GD), parent company of Gulfstream Aerospace, on Wednesday reported first-quarter profits of $763 million, or $2.48 per share. Those results significantly exceeded analysts’ expectations of $2.32.
General Dynamics shares have increased 12 percent since the beginning of the year and 41 percent in the last 12 months.
“We’re off to a very good start this year, somewhat better than our guidance,” said Phebe Novakovic, General Dynamics chairman and chief operating officer, adding that the company doesn’t, as a rule, change its guidance after the first quarter.
“We are on track for a productive 2017 as we continue our focus on operational improvement and successful execution on our robust backlog.”
The company’s overall revenues for the first quarter were basically flat, recording a half-percent drop from $7.47 billion to $7.44 billion.
While revenues were down in two of General Dynamics’ four business segments – marine systems and information systems and technology – and up 3.4 percent in combat systems, Gulfstream improved its revenues by double digits year-over-year.
In the first quarter, the company’s Savannah-based aerospace segment posted revenues of approximately $2 billion, up 16.5 percent over the same quarter in 2016. Operating earnings came in at $443 million, a robust 33.4 percent higher than the same quarter last year.
Aerospace operating margins improved from 18.6 percent to 21.4 percent.
Gulfstream delivered 30 airplanes – 28 large cabin and two mid-sized — in the first quarter, compared to 20 large-cabin and eight mid-cabin in Q1 of 2016.
Novakovic said the company has noted a sharp increase in business jet interest and activity level in Europe, as well as some in China.
The G500, one of two new business jets, is on schedule for certification, with the third test aircraft taking its first flight Wednesday, she said.
“We anticipate delivering the first completed G500 to a customer late this year.”
Q1 BY THE NUMBERS
- Diluted earnings per share from continuing operations up 19.2 percent to $2.48
- Operating earnings up 12 percent to $1.04 billion
- Earnings from continuing operations up 16.7 percent to $763 million
- Operating margin of 13.9 percent
- Revenue down 0.5 percent to $7.44 billion
- Operating earnings up 33.4 percent to $443 million
- Revenue up 15.5 percent to $2 billion
- Operating margin of 21.4 percent
- Funded backlog of $12.4 billion