General Dynamics Raises Guidance as Cost Cuts Lift Earnings

   By Lisa Beilfuss 
 

General Dynamics Corp. (GD) offered an upbeat outlook Wednesday, as cost cuts offset a surprise decline in second-quarter revenue, dragged by lower jet sales.

The Virginia-based aerospace and defense company sells communication systems, ships and combat vehicles to the government, in addition to Gulfstream business jets.

Solid demand of the high-end business jet has boosted the company's results in recent years, providing a reliable source of revenue even when the government has pulled in defense spending.

In the second quarter, though, General Dynamic delivered fewer Gulfstream jets. Aerospace sales slid 5.5% from a year earlier, pacing a 2.8% overall revenue decline.

The company has worked to trim expenses to support profit, and a 3% drop in second-quarter costs and expenses helped counter the sales decline and push earnings up slightly from a year earlier.

Overall, General Dynamics reported a profit of $758 million, or $2.44 a share, up from $752 million, or $2.27 a share, a year earlier.

Revenue slipped 2.8% to $7.67 billion.

Analysts projected $2.31 in earnings per share and $7.87 billion in revenue, according to Thomson Reuters.

For the full year, the company now expects to earn $9.70 a share, up from previous guidance of $9.20 and above the $9.52 analysts have predicted.

General Dynamic shares, up 5.2% this year, were inactive during premarket trading.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

July 27, 2016 08:39 ET (12:39 GMT)

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