Wednesday, July 25, 2012

Savannah-based Gulfstream reports second quarter growth

With double-digit growth in both revenue and operating earnings, Savannah-based Gulfstream Aerospace continued to be the bright spot for corporate parent General Dynamics, which Wednesday reported a drop of nearly 3 percent in second-quarter earnings. 

“Gulfstream continues to enjoy a sizeable multiyear large-cabin order backlog in a robust order pipeline,” company CEO Jay Johnson told investors and analysts in a morning conference call.

Gulfstream — one of four General Dynamics business units — designs, develops, manufactures and services business-jet aircraft, including the flagship of the fleet, the ultra-large-cabin, ultra-long-range G650, currently in development.

“We are nearly complete with FAA requirements for G650 flight testing and remain on track to obtain type certification in the third quarter,” Johnson said. “We continue to believe we can attain our objective of delivering about 24 green G650 aircraft this year and around 17 completed aircraft, with most completions coming in the fourth quarter.”

The G650 still has a backlog of nearly 200 orders with a five-year waiting list, Johnson said. The company’s other large-cabin, long-range business jets, the G450 and the G550, have waiting periods of 18 to 24 months.

“We expect to see improvement in General Dynamics’ second half orders, especially in aerospace.” Johnson told analysts.

Overall, General Dynamics (NYSE: GD) reported second-quarter 2012 net earnings of $634 million, or $1.77 per share on a fully diluted basis, compared with 2011 second quarter net earnings of $653 million, or $1.76 per share fully diluted. Second quarter 2012 revenues were $7.9 billion.

Company-wide operating margins for the second quarter were 12.2 percent, compared to 11.3 percent in the same quarter 2011.

Funded backlog at the end of the second quarter 2012 was $46.9 billion, and total backlog was $52.3 billion, much of it fueled by healthy demand for Gulfstream aircraft.

A softness in the company’s information technology segment — its largest business unit — and continued uncertainty in the defense spending arena, resulted in the earnings drop for the quarter, Johnson said.

General Dynamics, headquartered in Falls Church, Va., employs approximately 93,000 people worldwide.


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