By Aatreyee Dasgupta and Mike Stone
(Reuters) -General Dynamics beat expectations for fourth-quarter results on Wednesday, as strength in the company’s defense businesses offset persistent supply issues holding back jet deliveries.
The Russia-Ukraine war and the escalation of conflicts in the Middle East fueled demand for weapons and military vehicles during the quarter. The company’s three defense segments – combat systems, marine and technologies – posted revenue growth of 1.3%, 16.2% and 2.8%, respectively.
Revenue in the aerospace unit, which makes Gulfstream business jets, jumped 36.4%, even though supply of jet engines has been held up by longer certification times, keeping General Dynamics from completing deliveries on schedule.
The company delivered 136 aircraft during the year, lower than its revised October estimate of 150 aircraft. Its book-to-bill ratio of 0.9-to-1 for the quarter suggests billing was slightly higher than new orders received.
General Dynamics shares were down 3% in morning trading.
It now expects the Federal Aviation Administration to certify the G800 jet in the first half of 2025, and sees total Gulfstream deliveries of around 150 aircraft for the year.
Investors are concerned government defense budgets could face cuts under the newly formed Department of Government Efficiency (DOGE) headed by billionaire Elon Musk. Some analysts, however, have said Trump’s comments on acquiring Greenland and taking over the Panama Canal should support the case for increased spending.
“With respect to the DOGE, I think any actions that improve the efficiency and cost structure of organizations is a good thing and we would embrace that,” said CEO Phebe Novakovic during the quarterly earnings call.
The Virginia-based company reported a 14% rise in quarterly profit to $4.15 per share, compared with analysts’ estimates of $4.05, according to data compiled by LSEG.
Total quarterly revenue rose 14.3% to $13.34 billion, compared with estimates of $12.77 billion.
For 2025, General Dynamics forecast a total revenue of $50.3 billion, compared with 2024 revenue of $47.7 billion.
It sees 2025 company-wide profit of $14.80 per share, compared with $13.63 per share reported in 2024.
(Reporting by Aatreyee Dasgupta and Mike Stone; Editing by Devika Syamnath)
