July 29, 2009
GENERAL DYNAMICS
- Operating earnings rise 2.6 percent
- Revenues increase 10.9 percent
- Full-year EPS guidance raised
FALLS CHURCH, Va., July 29 - General Dynamics (NYSE: GD) today reported second-quarter 2009 earnings from continuing operations of $621 million, or $1.61 per share on a fully diluted basis, compared to 2008 second-quarter earnings from continuing operations of $641 million, or $1.60 per share fully diluted. The second-quarter 2008 results included a one-time 9-cent-per-share tax benefit. Revenues in the most-recent quarter grew to $8.1 billion, increasing 10.9 percent over second quarter 2008 revenues of $7.3 billion. Operating earnings in the second quarter of 2009 grew by 2.6 percent over the previous year's performance to $945 million.
Net earnings for the second quarter of 2009 were $618 million, compared to $641 million in the year-ago period. Net earnings on a per-share, fully diluted basis were $1.60 in the current quarter, unchanged year-over-year.
For the first six months of 2009, revenues were $16.4 billion, compared with $14.3 billion in the first half of 2008. Half-year earnings from continuing operations and net earnings were unchanged year-over-year at $1.2 billion. Earnings per share from continuing operations on a fully diluted basis for the first six months of 2009 were $3.14 per share, an increase of 4.3 percent when compared to 2008.
Margins
Each of the company's four business groups produced higher margin rates in second-quarter 2009 than in the first quarter. Notably, Aerospace margins grew 150 basis points. Company-wide, operating margins for the second quarter of 2009 were 11.7 percent, an increase of 70 basis points over the previous quarter.
Backlog
The company's total backlog at the end of the quarter was $67.6 billion,
a 22.2 percent increase over the $55.3 billion total backlog reported at the end of the second-quarter 2008. Funded backlog at the end of second-quarter 2009 increased 5.3 percent from one year ago, to $47.7 billion. In addition, the estimated potential contract value, which represents management's estimate of value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, grew to $17.7 billion at the end of second-quarter 2009 from 2008.
Cash
Net cash provided by operating activities from continuing operations in
the second quarter totaled $609 million. Free cash flow from operations, defined as net cash provided by operating activities from continuing operations less capital expenditures, was $520 million for the period. For the first half of 2009, net cash provided by operating activities from continuing operations was $763 million, and free cash flow from operations was $593 million.
"General Dynamics continued to demonstrate the strength of our portfolio
in the second quarter of 2009," said Jay L. Johnson, president and chief
executive officer. "Revenues grew in each of the company's four operating segments, and our operating earnings of $945 million were the highest in company history. Our commitment to financial performance and continuously improving execution generated very strong results.
"Based on the company's year-to-date performance and our understanding of what the remainder of 2009 will bring, we are raising our earlier guidance for full-year 2009 earnings from continuing operations, to $6.05 to $6.15 per share, fully diluted," Johnson said.
General Dynamics, headquartered in Falls Church, Virginia, employs
approximately 92,000 people worldwide. The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies.
Certain statements made in this press release, including any statements
as to future results of operations and financial projections, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management's expectations, estimates, understandings, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.
All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
WEBCAST INFORMATION: General Dynamics will webcast its second-quarter
securities analyst conference call, scheduled for 11:30 a.m. Eastern Time on Wednesday, July 29, 2009. The webcast will be a listen-only audio event, available at www.generaldynamics.com. An on-demand replay of the webcast will be available by 1:30 p.m. July 29 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 888-286-8010 (international: 617-801-6888); passcode 83347521. The phone replay will be available from 1:30 p.m. July 29 until midnight August 5, 2009.
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