The Herald of Everett, Washington
Customer service  |  Subscribe   |   Log in or sign up   |   Advertising information   |   Contact us

The top local business stories in your email

Contact Us:

Josh O'Connor
Phone: 425-339-3007

Maureen Bozlinski
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049

Jim Davis
Phone: 425-339-3097

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

General Dynamics rises 4.6% on jet forecast

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
Bloomberg News
WASHINGTON — General Dynamics Corp., the U.S. government’s No. 3 contractor, rose the most in nine months Wednesday after it forecast higher business-jet sales and said it would step up share repurchases.
The shares climbed 4.6 percent to close at $99.65 in New York, the biggest gain since April 24.
Sales at the Falls Church, Va., company’s aerospace unit, which makes Gulfstream jets, are projected to jump 11 percent to $9 billion this year, General Dynamics Chief Executive Officer Phebe Novakovic told analysts Wednesday on a conference call after the company released fourth-quarter results.
For 2014, profit is likely to be $6.80 to $6.85 a share on sales of about $30 billion, she said. Analysts had estimated profit of $7.27 a share on sales of $30.9 billion.
“So, much like last year, beating our guidance must come from outperforming the plan and the use of capital to repurchase shares,” Novakovic said on the call.
After falling short of its share-repurchase goal in 2013 because of pension funding needs, the company intends to step up the plan to return more cash to shareholders, she said.
Revenue at two of the company’s four units will decline in 2014, with the Information Systems and Technology segment dropping 20 percent, Novakovic said.
For the fourth quarter, net income was $495 million, or $1.40 a share, compared with a $2.13 billion loss a year earlier when General Dynamics posted a $2 billion goodwill writedown, according to a statement Wednesday.
After one-time items,profit was $1.76 a share, beating the $1.75 average estimate of 13 analysts surveyed by Bloomberg.
Sales rose less than 1 percent to $8.11 billion from the year-earlier period.
The maker of Abrams tanks and Gulfstream jets is the first among the top five Pentagon vendors to report fourth-quarter earnings this month. The biggest, Lockheed Martin Corp., announces its results Thursday.
Investors in defense companies will be reacting to guidance and management “tone,” Credit Suisse analysts in New York said in a note to clients last week.
Automatic federal-government spending cuts, known as sequestration, were eased by an agreement in Congress last month, which may provide some relief to contractors.
The Credit Suisse analysts, including Robert Spingarn, predicted minimal effects from October’s partial government shutdown because “any lost revenue was likely recovered before quarter-end.”
General Dynamics had gained 35 percent in the 12 months through yesterday, outpacing the Standard & Poor’s 500 Index’s gain of 24 percent.
The loss in last year’s fourth quarter was primarily attributed to General Dynamics cutting the goodwill value of its Information Systems and Technology unit by $2 billion because of the segment’s declining revenue.



Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus

Market roundup