GENERAL DYNAMICS REPORTS DIP IN PROFITS
26 Jul 09 General Dynamics (NYSE: GD) today reported second-quarter 2009 earnings from continuing operations of $621m, or $1.61 per share on a fully diluted basis, compared to 2008 second-quarter earnings from continuing operations of $641m, or $1.60 per share fully diluted. The second-quarter 2008 results included a one-time 9-cent-per-share tax benefit. Revenues in the most-recent quarter grew to $8.1bn, increasing 10.9 percent over second-quarter 2008 revenues of $7.3bn. Operating earnings in the second quarter of 2009 grew by 2.6 percent over the previous year’s performance to $945m.
Net earnings for the second quarter of 2009 were $618m, compared to $641m in the year-ago period. Net earnings on a per-share, fully diluted basis were $1.60 in the current quarter, unchanged year-over-year.
For the first six months of 2009, revenues were $16.4bn, compared with $14.3bn in the first half of 2008. Half-year earnings from continuing operations and net earnings were unchanged year-over-year at $1.2bn. Earnings per share from continuing operations on a fully diluted basis for the first six months of 2009 were $3.14 per share, an increase of 4.3 percent when compared to 2008.
Each of the company’s four business groups produced higher margin rates in second-quarter 2009 than in the first quarter. Notably, Aerospace margins grew 150 basis points. Company-wide, operating margins for the second quarter of 2009 were 11.7 percent, an increase of 70 basis points over the previous quarter.
The company’s total backlog at the end of the quarter was $67.6bn, a 22.2 percent increase over the $55.3bn total backlog reported at the end of the second-quarter 2008. Funded backlog at the end of second-quarter 2009 increased 5.3 percent from one year ago, to $47.7bn. In addition, the estimated potential contract value, which represents management’s estimate of value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, grew to $17.7bn at the end of second-quarter 2009 from 2008.
Net cash provided by operating activities from continuing operations in the second quarter totalled $609m. Free cash flow from operations, defined as net cash provided by operating activities from continuing operations less capital expenditures, was $520 million for the period. For the first half of 2009, net cash provided by operating activities from continuing operations was $763m, and free cash flow from operations was $593m.
“General Dynamics continued to demonstrate the strength of our portfolio in the second quarter of 2009,” said Jay L. Johnson, president and chief executive officer. “Revenues grew in each of the company’s four operating segments, and our operating earnings of $945m were the highest in company history. Our commitment to financial performance and continuously improving execution generated very strong results.
“Based on the company’s year-to-date performance and our understanding of what the remainder of 2009 will bring, we are raising our earlier guidance for full-year 2009 earnings from continuing operations, to $6.05 to $6.15 per share, fully diluted,” Johnson said.