Gulfstream Driving Growth at General Dynamics

 - January 23, 2014, 3:20 PM
Gulfstream Aerospace had a banner year in 2013. According to full-year results from parent company General Dynamics, the aerospace division, which includes Gulfstream and Jet Aviation, saw revenues climb 17.4 percent year-over-year to $8.118 billion, while profits soared 65 percent to $1.416 billion. Gulfstream delivered 144 completed jets (121 large-cabin and 23 midsize jets) last year versus 94 (83 large-cabin and 11 midsize) in 2012. Meanwhile, backlog was boosted in the fourth quarter mainly by rising orders for the G450 and G550. (Photo: Gulfstream Aerospace)

Gulfstream Aerospace “is the primary growth engine for both earnings and revenue” at General Dynamics, parent company chairman and CEO Phebe Novakovic said yesterday during a fourth-quarter investor call. The company’s aerospace unit, which includes Gulfstream and Jet Aviation, had a “very good year” in 2013, she added.

In fact, Gulfstream’s fourth-quarter performance contributed to the aerospace unit’s recording the best quarter over the past two years at any General Dynamics division, Novakovic noted. In the quarter, the division posted $2.135 billion in revenues, up 14.7 percent from the same quarter in 2012, while profits skyrocketed by 404.3 percent, to $348 million. For the entire year, revenues at the unit rose 17.4 percent year-over-year, to $8.118 billion, while profits soared 65 percent, to $1.416 billion.

At Gulfstream, completed jet deliveries climbed last year to 144 (121 large-cabin and 23 midsize jets) versus 94 (83 large-cabin and 11 midsize) in 2012. Notably, Gulfstream delivered more G650s last year and shipments of its midsize jets “more than doubled,” Novakovic said. In 2014, she predicts that Gulfstream will deliver 158 aircraft–118 large-cabin and 40 midsize jets.

Aerospace backlog at General Dynamics ended the year at $15.667 billion, up from about $13.8 billion on September 30. Novakovic said that the book-to-bill ratio in the fourth quarter exceeded 1:1, and this “not only increased backlog but [added] backlog where it was needed in the G550 and G450 programs.” As a result, G450 and G550 backlogs are now in the 12- to 15-month-range, while G650 backlog is 45 months.

Novakovic said that business aviation services provider Jet Aviation was “nicely profitable” last year.