General Dynamics Fourth Quarter a Strong Performance
In a conference call with analysts yesterday, General Dynamics president and CEO Jay Johnson summarized full-year and fourth-quarter results for the defense and aerospace manufacturing conglomerate. Overall, sales climbed 9.2 percent over 2008, to nearly $32 billion, “driven entirely by our defense businesses,” he said. This growth was offset by a 6.2-percent decline in aerospace revenue during 2009 versus 2008. Operating earnings for aerospace dropped 30.8 percent during 2009 compared with 2008, to $707 million from $1.021 billion, still “an impressive performance in a challenging market environment,” he said. “The aerospace group finished an exceedingly difficult year with a solid fourth quarter,” which included “continued strength in order activity, substantially fewer customer defaults, improved service volume and the first flights of our new G250 and G650.”
Johnson attributed the 6.2-percent sales decline to fewer green airplane deliveries and a 15-percent reduction in the service business, which includes factory-owned service centers and the Jet Aviation subsidiary. For 2009, Gulfstream delivered 94 green airplanes, down from 156 in 2008. Of the 94 green airplanes last year, 75 were large-cabin and 19 midsize jets, compared with 87 large and 69 midsize during 2008. During the fourth quarter, Gulfstream delivered one midsize and 19 large jets. Total outfitted deliveries for 2009 were 110 (78 large, 32 midsize) versus 152 (87 large, 65 midsize) the previous year. Fourth-quarter orders outpaced deliveries and Gulfstream’s backlog has grown slightly, to $19.3 billion. Large-cabin backlog is “essentially sold in 2010,” Johnson said, “three-quarters sold in 2011 and we’re making significant progress in 2012.” Gulfstream will produce 77 large-cabin jets this year, while midsize production drops to 14 airplanes. Both the G250 and G650 are on schedule for FAA certification next year.