General Dynamics third-quarter sales fall amid aerospace headwinds, but margins rise

  • 10/28/2020
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WASHINGTON (Reuters) - Defense contractor General Dynamics Corp GD.N reported an 8.7% fall in third-quarter earnings on Wednesday, sending its shares lower as the coronavirus crisis continues to impact aerospace sales.Shares fell 1.1% in morning trading, and had earlier dropped 2.6% before the market opened. On an earnings conference call with investors , Chief Executive Phebe Novakovic reaffirmed a forecast given a quarter ago of 2020 earnings per share of between $11 and $11.10. Novakovic said that of 100,000 employees, 1,800 have had COVID-19, with 1,500 of those recovered and back at work. Profit margins rose to 11.5%, up slightly from the second quarter, as workflow techniques were improved during the pandemic. Margins were still down 1 percentage point from a year ago before the pandemic. The Gulfstream business jet maker delivered 32 planes to customers, six fewer than a year ago. Pandemic-related lockdowns have hindered jet deliveries since early in the year. Revenue at the aerospace unit fell 20.8% to $1.95 billion compared with a year ago. Profit margins at the unit also fell to 14.3% from 15.8% in the same period last year. The marine systems unit, which makes ships and submarines for the U.S. Navy, saw revenue up 7.6% compared with a year earlier. Half that growth comes from the Columbia-class submarine program, Novakovic said on the call with investors. Earnings per share fell to $287 million, or $2.90 per share, in the third quarter ended Sept. 27, from $291 million, or $3.14 per share, a year earlier.

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