General Dynamics (NYSE:
) Wednesday reported fourth quarter earnings that missed analyst
estimates and shares fell. Further, revenue came in short of
analyst projections for the quarter and the company guided well
below forecasts for the full year 2013. Shares moved sharply
lower on the news.
For the fourth quarter of 2012, General Dynamics reported
earnings per share of $1.39, well below analysts estimates of
earnings per share of $1.90. Also, revenue came in light in the
quarter at $8.08 billion, below the forecasts of $8.8
And if the large miss on both the top and bottom lines was not
enough, General Dynamics guided full year 2013 earnings per share
between $6.60 and $6.70, well below the street consensus of $7.32
for the year.
In the fourth quarter, General Dynamics reported a few
one-time charges that affected performance. The company recorded
a $2 billion charge in its Information Systems and Technology
Group, recognizing the slowed impact of defense spending in the
The company was also forced to take charges totaling $867
million, a large amount relating to impairments of intangible
The company's total backlog was $51.3 billion at the end of
2012. In the fourth quarter, orders were strong for the Marine
Systems group, including $2.4 billion in awards to continue the
development of the U.S. Navy's next-generation strategic
deterrent submarine, to purchase materials for Virginia-class
attack submarines and to construct two commercial
Other large orders received in the quarter include awards for
additional Stryker infantry combat vehicles, for Abrams tanks,
and for the production of tactical networking equipment and
radios for the U.S. Army.
Total potential contract value, the sum of all backlog
components, was $78.1 billion at the end of the year.
Phebe N. Novakovic, chairman and chief executive officer of
General Dynamics, said, "General Dynamics' operating results in
2012 and the charges that we have recorded in the fourth quarter
reflect the fact that some of our markets are contracting as
government budgets shrink at home and abroad. They also suggest
opportunities for improvement in some areas of our performance,
which we are addressing."
"General Dynamics is a strong corporation with relevant
product and service offerings that are critical to our customers'
missions. We will continue to manage our business aggressively as
we approach the opportunities and the challenges of the future,"
General Dynamics shares slid in the pre-market following the
weak earnings and the guidance cut. Shares fell as much as 5
percent pre-market and, as of writing, traded lower by 4.67
Investors await the start of the earnings conference call for
more clarity into the quarter and the full year from
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