General Dynamics Raises Full-Year Earnings Outlook, Posts 4.9% Profit Gain

General Dynamics Corp., the maker of Abrams tanks and Gulfstream business jets, posted second-quarter profit that rose 4.9 percent and raised its full-year earnings forecast as operating margins widened.

Net income increased to $648 million, or $1.67 a share, from $618 million, or $1.60, a year earlier, the Falls Church, Virginia-based company said today in a statement. Profit excluding some items was $1.68 a share, beating the $1.61 average estimate of 17 analysts compiled by Bloomberg.

Chief Executive Officer Jay Johnson has projected growth to resume this year in the Gulfstream business-jet unit after the company cut production and costs last year. Second-quarter sales were little changed at $8.1 billion.

Earnings from continuing operations in 2010 will be as much as $6.65 a share. The company had previously forecast profit of as much as $6.50. Analysts had projected $6.58, the average of 20 estimates.

General Dynamics fell 72 cents, or 1.2 percent, to $61.77 yesterday in New York Stock Exchange composite trading. The shares had declined 9 percent this year before today.

To contact the reporter on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net

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