General Dynamics Profits Jet Higher on Sales of Business Aircraft
Based in Reston, Virginia, the aerospace and military contractor provides a range of products and services for the Pentagon and other U.S. government agencies, as well as private sector and commercial customers worldwide.
In a conference call with Wall Street analysts on April 23, General Dynamics CEO Phebe Novakovic said the company's four business segments saw increases in earnings and revenue compared to a year ago. She noted the company's growth and strong performance in the defense and aerospace sectors, which saw a 50 percent increase in aircraft deliveries.
'This business has become a real jewel. In summary, the aerospace team has had a good quarter,' Novakovic said of the company's Gulfstream subsidiary and jet aviation business.
During the quarter, Gulfstream delivered 36 business jets to customers worldwide, including 13 of its new ultra-large-cabin G700 aircraft that can carry up to 19 passengers. A year ago, Gulfstream delivered its first G700 to customers, providing the company with a new flagship executive jet to rival Bombardier's Global 7500 and Dassault Falcon's new 10X entry.
Last week, Gulfstream also announced that the company's new G800 was certified by the Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency. Produced at the Savannah, Georgia, production facility, the G800 is billed as the world's longest-range business jet, capable of traveling over 8,200 nautical miles (9,400 miles) at speeds nearing Mach 0.935.
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Gulfstream's fleet of executive business aircraft also includes the G400, G500, G600, and G650. The latter recently recorded the farthest and fastest flight in business aviation history, traveling from Singapore to Tucson, Arizona, a distance of about 9,200 miles, in just over 15 hours, and completed production in February. Since then, the new executive jet entry has moved to the company's completion center in Appleton, Wisconsin, where the first G650 will be delivered to the first customer later this year.
During the conference call, Novakovic also highlighted General Dynamics' position as one of the nation's top prime defense contractors, providing a full spectrum of technology, artificial intelligence, and machine learning services and products to military, intelligence, and federal civilian customers.
Under the company's combat and marine subsidiaries, the prime defense contractor General Dynamics' brand-name products for the U.S. military include the M1 Abrams tank, Virginia-Class submarines, and Stryker anti-tank missiles and armored vehicles used by Ukraine in the ongoing war with Russia.
'Demand for combat system products continues to be robust, with particular strength in Europe,' said Novakovic, citing 'the heightened threat environment' globally.
The General Dynamics chief executive said that in addition to recent contracts exceeding $1 billion to supply the U.S. Army with battlefront combat vehicles, which Ukrainian soldiers are now using against Russian infantry, the company is also working with the Pentagon to accelerate the modernization of the Abrams M-1 tank.
In late 2023, the U.S. Army first
After earlier upgrades in 2018, the new Army tank is considered the world's most lethal battlefield tank. Army officials have said publicly that the latest version will be updated with the latest modular systems, allowing quicker technological upgrades and requiring fewer resources.
'We are rapidly increasing munitions capacity and production with the opening of our projectile facility in Texas and our load, assembly, and pack facility in Arkansas,' Novakovic confirmed. 'All in all, combat had a solid quarter and is off to a good start for the year.'
General Dynamics
On a company-wide basis, orders in the quarter totaled $10.2 billion, and backlog at the end of the quarter was $88.7 billion. As the Trump administration and Elon Musk's Department of Government Efficiency (DOGE) move forward with
In response to analyst questions about the impact of Trump administration tariffs, trade policy, and possible DOGE and Department of Defense budget cuts on company operations, the General Dynamics CEO said the company preferred to hold comments until more information is available.
'If I were more specific, I would be wrong. I am just really sharing how we see it from our foxhole,' said Novakovic.
'Rumors are rampant, and I just want to see what the [Trump] budget shows.'
Taking a page from a growing number of Fortune 500 companies, Novakovic said General Dynamics would not revise or update its yearly financial forecast. Earlier in January, the company provided earnings per share guidance of $14.75 billion to $14.85 billion for the first quarter, compared to the consensus earnings per share estimate of $13.7 billion.
In Wednesday's New York Stock Exchange session, General Dynamics' shares settled at $265.53, down $9.27 or 3.3 percent.
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