General Dynamics reported a a mixed quarter this week as the defense giant missed analyst revenue estimates, but beat their fourth-quarter profit estimates.
Strong growth in the aerospace unit helped the company, even as supply chain bottlenecks and labor chain shortages lingered.
Shares fell 1% in pre-market trading on the initial announcement Wednesday. The stock rebounded by Friday though to finish at $212.82.
President Joe Biden has not signaled 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 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 – based in Virginia, but with a signifiant presence in San Diego – delivered 39 Gulfstream business jets versus 40 a year ago. In October, officials said it planned to deliver 40 in the fourth quarter.
Sales in General Dynamics’ aerospace unit, which makes Gulfstream jets, rose 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 Dec. 31, from $1 billion, or $3.49 per share, a year earlier.
Analysts, on average, expected the company to post a quarterly profit per share of $3.37, according to Refinitiv IBES data.
The company beat its own October annual earnings per share guidance of $11.50 by $0.05.
The results come a day after Lockheed Martin and Raytheon Technologies Corp beat analyst estimates for quarterly profit.
(Reporting by Nathan Gomes in Bengaluru and Mike Stone in Washington; editing by Aditya Soni, Ramakrishnan M. and Chizu Nomiyama)