27 Jan 10. General Dynamics (NYSE: GD) today reported 2009 fourth-quarter earnings from continuing operations of $618m, or$1.58 per share on a fully diluted basis, compared to 2008 fourth-quarter earnings from continuing operations of $630m, or $1.62 per share fully diluted. Full-year 2009 earnings from continuing operations were $2.41bn, or $6.20 per share on a fully diluted basis, compared to $2.48bn and $6.22 per share, respectively, for 2008. Revenue was $7.9bn in the fourth quarter and $32bn for the full-year, an increase of 9.2 percent over full-year 2008.
Company-wide operating margins increased to 12 percent for the fourth
quarter of 2009, driven by improved performance at each of the company’s defense businesses. Notably, operating margins increased in Combat Systems by 160 basis points; Marine Systems and Information Systems and Technology also improved margin performance, by 50 and 80 basis points, respectively, in the quarter.
Net cash provided by operating activities totalled $1.5bn in the fourth quarter and $2.86 bn for the full year. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $1.36bn in the quarter and $2.47bn for the year. Free cash flow as a percentage of earnings from continuing operations was 103 percent for the year.
The company’s total backlog was $65.5bn at the end of the fourth quarter, reflecting increases in both Aerospace and Combat Systems over the end of the third quarter. In Aerospace, new-aircraft order activity continued to be strong in the fourth quarter. Combat Systems received significant orders in the quarter as well, including a $2.2bn contract for a foreign military sale of light armored vehicles, and $320m for design, engineering, modernization and enhancements of Stryker vehicles for the U.S. Army.
Funded backlog at the end of fourth-quarter 2009 was $45.9bn. In addition, the estimated potential contract value, representing management’s estimate of the value of unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $17.6bn at year-end 2009. Total potential contract value, the sum of all backlog components, was $83.1bn at the end of the year.
General Dynamics’ net earnings for the fourth quarter of 2009 were $614m, compared to fourth-quarter 2008 net earnings of $612m. Net earnings for the full year were $2.39bn in 2009, compared to $2.46bn in 2008.
“General Dynamics performed well in 2009,” said Jay L. Johnson, president
and chief executive officer. “The strength of our diverse portfolio was
evident as continuing customer demand for our defense-related products balanced the impact of the global economic challenges on business aviation. By marrying that strength with our commitment to financial performance and effective execution, the business generated strong margins and excellent cash flow in the fourth quarter and for the full year.
“Based on the company’s performance in 2009 and our current understanding of the year ahead, we expect 2010 earnings to be in the range of $6.40 to $6.50 per share, fully diluted,” Johnson said.