By Aatreyee Dasgupta, Mike Stone
(Reuters) -General Dynamics reported a more than 10% rise in third-quarter revenue on Wednesday, driven by strength in its defense unit, but fewer business jet deliveries hurt company profits.
Shares of the Reston, Virginia-based company were flat in early trading after reporting quarterly revenue of nearly $11.67 billion, up from $10.57 billion a year ago.
The ongoing conflicts in Ukraine and the Middle East and the United States’ efforts to replenish its inventory are driving increased global demand for munitions, vehicles and other military equipment.
For the quarter ended Sept. 29, the company’s aerospace segment which makes Gulfstream business jets saw revenue rise to $2.4 billion, up 22.1% from a year ago. But profit margins were 12.3%, lower by nearly a percentage point compared to the same period a year ago.
Total deliveries in the company’s aerospace segment rose to 24 jets, including four G700s, from 22 a year ago. But the company said it delivered 11 fewer G700 business jets than expected due to engines arriving later than hoped due to an elongated certification timeline.
This summer, the company said it planned on delivering 160 of the jets this year. The company said on a post earnings conference call that they now expect 150 business jet deliveries in the year.
The company’s earning per share for the quarter were $3.35 which came in below Wall Street analysts estimates of $3.47. On a post earnings conference call the company revised down its 2024 earnings per share estimate to $14. This summer the company had projected $14.40 – $14.50.
The company’s nuclear-powered submarine making Marine Systems business unit saw revenue rise nearly 20% to $3.6 billion.
Phebe Novakovic said that supplier’s component deliveries for submarines have been slow. She revised the Marine System’s business unit’s 2024 profit margins to 6.9%, down from a mid-summer estimate of 7.4%.
In the quarter the unit received significant contract awards from the Pentagon including $780 million for the construction of an additional John Lewis-class (T-AO-205) refueling ship with options for more, and $1.5 billion for long-lead materials for Block VI Virginia-class submarines.
(Reporting by Aatreyee Dasgupta in Bengaluru and Mike Stone in Washington; Editing by Maju Samuel, Chizu Nomiyama and Franklin Paul)
