General Dynamics Earnings: Contracting Government Spend Affects Top Line

General Dynamics Corp. (NYSE:GD) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3.54%.

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General Dynamics Corp. Earnings Cheat Sheet

Results: Net loss of $2.13 billion (loss of $6.07 cents per diluted share) in the quarter versus a net loss of $603 million in the year-earlier quarter.

Revenue: Decreased 11.67% to $8.08 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: General Dynamics Corp. reported adjusted net profit of $1.39 per share. By that measure, the company missed the mean analyst estimate of $1.88. It missed the average revenue estimate of $8.8 billion.

Quoting Management:

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,” Novakovic said.

Key Stats:

Revenue increased 1.84% from $7.93 billion in the previous quarter. Net income increased to $0 in the quarter versus a net loss of $600 million in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.72 to a profit $1.7. For the current year, the average estimate has moved down from a profit of $7.09 to a profit of $6.95 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)