FALLS CHURCH, Va. (AP) — Defense contractor General Dynamics Corp. said Wednesday that its net income rose 8.5 percent as cost cuts more than offset lower revenue. The results beat Wall Street forecasts.
The company offset weaker defense spending by trimming operating costs and generating strong results in its Gulfstream business jets division.
Net income climbed to $651 million, or $1.84 per share, for the July-September period, from $600 million, or $1.70 per share, a year earlier. Analysts surveyed by FactSet expected adjusted earnings of $1.68 per share, on average.
Revenue fell 1.7 percent to $7.80 billion but still came in above analysts' $7.75 billion forecast. Sales in the company's aerospace division, which includes Gulfstream jets, jumped by 17.2 percent, partly offsetting a 30.1 percent plunge in revenue in the combat-systems segment. Two other units, marine systems and information technology, grew slightly.
General Dynamics cut operating costs by 2.7 percent. The overall operating profit margin grew to 12.3 percent, up from 11.4 percent a year earlier.
The shares fell $1.94, or 2.2 percent, to $86.22 in midday trading. The stock is up 25 percent so far this year.