General Dynamics Corp Earnings: Four Quarters of Rising Profit Now Broken

S&P 500 (NYSE:SPY) component General Dynamics Corporation (NYSE:GD) reported its results for the fourth quarter. General Dynamics offers products and services in business aviation, combat vehicles, weapons systems and munitions as well as information systems, technologies and services.

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General Dynamics Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the aerospace/defense products and services company fell to $603 million ($1.68 per share) vs. $729 million ($1.91 per share) a year earlier. This is a decline of 17.3% from the year earlier quarter.

Revenue: Rose 6.3% to $9.15 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: GD fell short of the mean analyst estimate of $2 per share. Analysts were expecting revenue of $9.29 billion.

Quoting Management: “Jet Aviation’s aircraft-completions business continued to face lower OEM business-jet volume and delays in several narrow-body and wide-body aircraft which are nearing delivery,” said Jay L. Johnson, chairman and chief executive officer. “We have taken appropriate steps to address these issues. “The charges taken in our completions business mask an otherwise solid fourth-quarter performance by General Dynamics, marked by excellent cash generation, delivery of the first 12 Gulfstream G650 production aircraft to the final phase of manufacturing, and strong margins in our defense businesses,” Johnson continued.

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the third quarter, net income rose 0.3% from the year earlier, while the figure increased 0.8% in the second quarter, 3.5% in the first quarter and 18.7% in the fourth quarter of the last fiscal year.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 6 cents, and in the second quarter, it was ahead by 6 cents.

A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue fell 2% in the third quarter and fell 2.8% in the second quarter.

Looking Forward: The average estimate for the first quarter of the next fiscal year remains unchanged at $1.77 a share. Over the past three months, the average estimate for the fiscal year has climbed from $7.20 per to share to $7.25.

Competitors to Watch: Northrop Grumman Corp. (NYSE:NOC), Raytheon Company (NYSE:RTN), The Boeing Company (NYSE:BA), Lockheed Martin Corp. (NYSE:LMT), ITT Corporation (NYSE:ITT), FLIR Systems, Inc. (NASDAQ:FLIR), Rockwell Collins, Inc. (NYSE:COL), Alliant Techsystems Inc. (NYSE:ATK), Cubic Corporation (NYSE:CUB), and Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)