General Dynamics 1Q Profit Up, Aerospace Gains

 - May 14, 2010, 11:51 AM

General Dynamics yesterday reported first-quarter 2010 earnings from continuing operations of $599 million, up from $593 million for the same period in 2009, giving much of the credit to gains in the aerospace business segment, which consists of Gulfstream, Jet Aviation and General Dynamics Aviation Services. “It was a good first quarter,” said GD president and CEO Jay Johnson in an investor conference call. First-quarter revenues from the aerospace group were $1.4 billion, up nearly 15 percent over the previous quarter thanks to more aircraft volume. Johnson also cited a “very robust” aircraft backlog valued at $18.5 billion, and the fact that orders outpaced order cancellations and defaults for the fourth consecutive quarter. He said large-cabin orders are strong, but that interest in Gulfstream’s midsize line is “still uncertain [although] we’re seeing order activity, not just tire-kicking.” While default and cancellations in the first quarter were up slightly over the year-ago period, the five G650 cancellations were all instantly backfilled. According to Johnson, “We remain on pace to achieve our [2010] delivery plan, which includes approximately 77 large-cabin aircraft and 15 midsize [jets].” Despite a generally positive first quarter, he said there were no plans to cancel a two-week planned furlough this July.