GENERAL DYNAMICS INCREASES REVENUE BY 18%
29 Apr 09. General Dynamics (NYSE: GD) today reported first-quarter 2009
earnings from continuing operations of $593m, or $1.54 per share on a fully diluted basis, compared with 2008 first-quarter earnings from
continuing operations of $573m, or $1.42 per share fully diluted. Revenues grew to $8.3bn in the quarter, an 18 percent increase over
first-quarter 2008 revenues of $7bn. Net earnings for the first quarter of 2009 were $590m, compared to $572m in the first quarter of 2008.
“General Dynamics’ performance in the first quarter of 2009 was very strong,” said Nicholas D. Chabraja, chairman and chief executive officer. “Revenues grew at double-digit rates in all four segments of the company, with double-digit organic growth in our defense businesses, demonstrating the continued strength of demand among government customers for the products and services we deliver. The growth in Aerospace revenues is attributable to the acquisition late last year of Jet Aviation.”
Company-wide operating margins for the first quarter of 2009 were 11
percent, compared to 12.3 percent in the year-ago period. Marine Systems, however, increased operating margins by 90 basis points over the year-ago period to 9.8 percent, based on excellent performance on the Virginia-class, T-AKE, commercial product carrier, DDG-51 and DDG-1000 programs.
Funded backlog at the end of first-quarter 2009 increased 23 percent from one year ago, to $49.2bn. The company’s total backlog at the end of the quarter was $71.1bn, 43 percent higher than the $49.8bn total backlog reported at the end of the year-ago period. In addition to the backlog, the estimated potential contract value, which represents management’s estimate of value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $17.9bn at the end of first-quarter 2009.
Net cash provided by operating activities from continuing operations in the quarter totaled $154m. Free cash flow from operations, defined as net cash provided by operating activities from continuing operations less capital expenditures, was $73m for the period.
“Cash provided by our defense businesses remained strong in the quarter, while the Aerospace group was a user of cash. We expect this to correct itself through the remainder of the year, such that free cash flow should approximate net income by year’s end,” Chabraja said.
“Looking ahead, we remain confident that General Dynamics is well-positioned to maximize the value of our $71bn backlog as we continue to focus on excellent program execution and value creation for our shareholders,” Chabraja said.
CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
First Quarter Variance
2009 2008 $ %
Revenues $8,264 $7,005 $1,259 18.0%
Operating costs and expenses 7,359 6,144 (1,215)
Operating earnings 905 861 44 5.1%
Interest, net (39) (19) (20)
Other, net 3 3 –
Earnings from continuing operations
before income taxes 869 845 24 2.8%
Provision for income taxes 276 272 (4)
Earnings from continuing operations $593 $573 $20 3.5%
Discontinued operations, net of tax (3) (1) (2)
Net earnings $590 $572 $18 3.1%
Earnings per share – basic
Continuing operations $1.54 $1.43 $0.11 7.7%
Discontinued operations $(0.01) $- $(0.01)
Net earnings $1.53 $1.43 $0.10 7.0%
Basic weighted average
shares outstanding (in millions) 385.8 400.8