Defense and aerospace operator
General Dynamics Corporation
) announced fourth quarter and full year 2012 earnings. The
company reported fourth quarter earnings of $1.39 per share,
missing the Zacks Consensus Estimate of $1.90 per share.
The reported figures were below the year-ago figure of $2.20
per share. The results reflect negative impact of defense budget.
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Including one-time charges of $7.46 per share related to the
goodwill impairment and other charges, the company's GAAP loss
per share was $6.07 as compared to earnings per share of $1.69 in
the year-ago period.
Pro forma earnings per share for full year 2012 were $6.48, down
from the Zacks Consensus Estimate of $7.10 and the year-ago
figure of $7.46. Including one-time charges of $7.42, GAAP loss
per share was 94 cents versus earnings per share of $6.87 in the
General Dynamics generated total revenue of $8.08 billion in the
reported quarter versus $9.15 billion in the year-ago quarter,
reflecting a decrease of 11.7%. The year-over-year decrease in
revenue reflects declining revenues at all segments, except
Aerospace. Reported quarter revenue also failed to meet the Zacks
Consensus Estimate by $731 million.
In full year 2012, the company clocked revenue of $31.51 billion,
down 3.56% year over year. The top line also failed to meet the
Zacks Consensus Estimate of $32.71 billion.
In the reported quarter, operating loss was $1.90 billion
compared with an operating profit of $0.95 billion in the
year-ago period. The company reported operating income of $0.83
billion for full year 2012, down from $3.83 billion in the
At the end of fourth quarter 2012, the company's total backlog
was $51.3 billion compared with $57.4 billion at the end of the
fourth quarter of 2011. Total potential contract value at the end
of fourth quarter 2012 was $78.1 billion versus $85.4 billion at
the end of fourth quarter 2011.
The Aerospace segment reported revenues of $1.86 billion in the
fourth quarter, up 0.2% from the prior-year period.
Combat Systems reported quarterly revenue of $1.98 billion, down
24.3% year over year. During the quarter, the segment received a
contract worth $355 million for Stryker wheeled combat vehicle
program, contractor logistics support and for the production of
62 Nuclear, Biological, Chemical Reconnaissance vehicles.
Marine Systems reported revenue of $1.66 billion, down 5.3% from
the year-earlier period. The segment received a sizeable contract
worth $1.8 billion for research and development work for a new
class of ballistic-missile submarines under the Ohio Replacement
Program. It also received many other contracts.
Information Systems and Technology reported revenue of $2.58
billion, reflecting a decline of 11.8% from the previous year. In
the fourth quarter of 2012, the segment received a contract for
the production of 3,726 Handheld, Manpack and Small Form-Fit
(HMS) radios and accessory kits worth $250 million.
Cash and cash equivalents as of Dec 31, 2012 were $3.30 billion
year over year, up from $2.65 billion at the end of Dec 31, 2011.
For full-year 2012, long-term debts were $3.91 billion,
approximately flat year over year.
In full year 2012, capital expenditure of the company decreased
to $0.45 billion from $0.46 billion in the year-ago period. Net
cash provided by operating activities were $2.69 billion in full
year 2012, down 17% year over year.
The company expects earnings from continuing operations to be in
the range of $6.60 to $6.70 per share.
General Dynamics missed the Zacks Consensus Estimates. The
results indicate that some of its markets are contracting as
government budgets dip. However, the company's ability to get
consistent contracts will boost the top line going forward.
Moreover, its relevant product and service offerings are
important for its customers.
Northrop Grumman Corporation
), General Dynamics presently retains a short-term Zacks Rank #3
(Hold). One other Zacks Rank #3 (Hold) rating company
) also announced fourth quarter 2012 adjusted earnings of 56
cents per share versus 49 cents in the year-ago quarter. The
fourth quarter result, however, came below the Zacks Consensus
Estimate of 57 cents.