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16 Apr 03. General Dynamics Corp. (NYSE:GD – News) said first-quarter profit fell 3.5%, as weak sales of its Gulfstream aircraft offset strength in its other businesses.

The company reported net income of $221m, or $1.11 a share, (2002: $229m, or $1.13), sales rose 10% to $3.42bn from $3.1bn.

Chairman and Chief Executive Nicholas D. Chabraja said difficulties on a commercial shipbuilding project and weakness in the aerospace group offset growth in sales and earnings in its other divisions.

Net sales for the aerospace group fell 22% to $594mi. Mr. Chabraja said both sales and earnings for the Gulfstream aircraft business fell because of fewer deliveries than the year-earlier quarter, as well as pricing weakness and challenges in the market for preowned jets.

Mr. Chabraja defended the business, noting that Gulfstream has received an order worth as much as $473m from Israel to supply four Gulfstream G550 aircraft, with an option for two more.In fact, new orders during the quarter led to a total company backlog of $23.9bn, 12% more than at the same time last year.

First-quarter sales for General Dynamics’ information systems and technology segment rose 17% to $995m. The combat systems segment saw sales jump 42% to $815m. Sales of the company’s marine systems, including nuclear submarines and other combat vessels, grew 13% to $976m.

Sales for General Dynamics’ resources segment, which includes a coal-mining operation and a leasing business for liquified natural gas tankers, fell 18% to $41m.

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