General Dynamics profit beats as weapons unit drives sales


General Dynamics Corp reported a better-than-expected quarterly profit on Wednesday, as sales in its unit that makes tanks and weapons systems gained from the U.S. government’s move to boost defense spending.

The company’s shares rose 1.3 percent to $224.80 in pre-market trading.

Sales in the combat systems unit rose 11.9 percent to $1.44 billion in the quarter ended April 1.

However, the company’s aerospace division, its biggest unit, reported a 12 percent drop in revenue due to lower deliveries of Gulfstream aircraft.
“We think Gulfstream business jet deliveries have found a bottom and the aerospace segment will begin growing again,” Morningstar analyst Chris Higgins said in a pre-earnings note.

The business jet market has struggled to recover since the financial crisis, with overall sales last year about half of the 1,317 planes delivered in 2008.

Earlier this month, General Dynamics bought peer CSRA Inc in a deal valued at about $9.7 billion.

Net earnings rose to $799 million, or $2.65 per share, in the quarter ended April 1 from $763 million, or $2.48 per share, a year earlier.

Analysts had expected a profit of $2.49 per share, according to Thomson Reuters I/B/E/S.

Revenue rose to $7.5 billion from $7.4 billion.