General Dynamics beats revenue, beats forecasts

A General Dynamics NASSCO ship yard entrance is shown in San Diego, California, June 17, 2019. REUTERS Mike Blake File Photo

Jan 26 Reuters -- General Dynamics Corp missed analyst revenue estimates on Wednesday but beat fourth-quarter profit forecasts as it grew strongly despite supply chain bottlenecks and lingering labor shortages.

After an initial pre-market dip, the U.S. defense giant's shares turned positive when General Dynamics gave its outlook on a conference call with investors in 2022.

General Dynamics CEO Phebe Novakovic said on the call that it was expanding capacity in its business jet wing-making to meet rising demand.

She said company-wide revenue was expected to be $39.2 billion to $39.45 billion in the year 2022, with a profit margin of 10.8% and earnings per share between $12 and $12.15. The company's revenue was $38.5 billion in 2021, according to the Reston, Virginia-based company.

General Dynamics' results came a day after Lockheed Martin LMT.N and Raytheon Technologies Corp RTX.N beat analyst estimates for quarterly profit, encouraged by easing restrictions around the globe. U.S. President Joe Biden has not indicated that he plans to slash the 2023 budget for General Dynamics' biggest customer, the Pentagon, despite progressive Democrats calling for a reduction in military spending and the U.S. withdrawal from Afghanistan.

Demand for business aviation stayed strong in the last three months of 2021, helped by easing travel restrictions, higher vaccination rates and the lure of private flights.

In the quarter, the company delivered 39 Gulfstream business jets compared to 40 a year ago. In October, the company said it planned to deliver 40 in the fourth quarter.

Sales in General Dynamics' aerospace unit, which makes Gulfstream jets, increased to $2.56 billion from $2.44 billion a year earlier, while overall revenue fell to $10.29 billion from $10.48 billion.

Net earnings fell to $952 million, or $3.39 per share, in the quarter ended December 31, from $1 billion, or $3.49 per share a year ago.

Analysts were expecting the company to have a quarterly profit of $3.37, according to Refinitiv IBES data.

The company beat its October earnings per share guidance of $11.50 by $0.05.