April 23 (Bloomberg) -- General Dynamics Corp., the U.S. government’s No. 3 contractor, reported first-quarter profit exceeding analysts’ estimates on higher sales of Gulfstream business jets.
Net income from continuing operations in the quarter rose 4.2 percent to $595 million, or $1.71 a share, compared with $571 million, or $1.62 a share, a year earlier, the company said in a statement today. That beat estimates of $1.64, the average of 20 analysts surveyed by Bloomberg.
General Dynamics raised its profit outlook for the year to $7.05 to $7.10 a share, compared with $6.80 to $6.85 a share forecast in January. While sales for the quarter fell 1.1 percent to $7.32 billion, a sharper decline was prevented by a 20 percent gain in aerospace revenue propelled by Gulfstream jet deliveries.
“History has proven us correct,” Phebe Novakovic, chairman and chief executive officer of Falls Church, Virginia-based General Dynamics, said on a conference call with investors. “It was a good market to invest in.”
General Dynamics rose 3.3 percent, the most in about three months, to close at $111.58 in New York. It has surged 66 percent in the past 12 months, compared with a 19 percent gain in the Standard & Poor’s 500 Index.
Defense companies are coping with a shrinking pool of federal contracts as the U.S. withdraws combat troops from Afghanistan and reduces spending under a process known as sequestration.
Some of the across-the-board cuts were averted when President Barack Obama in January signed a $1.1 trillion spending bill to fund the government through Sept. 30.
To contact the reporter on this story: Jonathan D. Salant in Washington at firstname.lastname@example.org
To contact the editors responsible for this story: Stephanie Stoughton at email@example.com Larry Liebert