General Dynamics revenues miss as profit rises on jet demand

Gulfstream jet maker General Dynamics Corp (GD.N) on Wednesday posted a 3.9% rise in second-quarter profit as business jet demand remained strong, but revenues missed forecasts as supply chain problems continued to hamper the defense industry.

Shares were up 1.6% in early trading after the Reston, Virginia-based company posted quarterly revenue of $9.2 billion, a 0.3% drop over last year, missing Wall Street’s $9.4 billion estimate.

Business jet demand in the quarter remained robust as wealthier passengers opted for charter planes to avoid flight cancellations from regular carriers.

Virginia-based General Dynamics reaffirmed expectations it would deliver 123 aircraft in 2022, chief financial officer Jason Aiken said during a call with analysts.

Aiken also flagged a strong growth in flight service activity driving up revenue and the outlook for its aerospace business.

Meanwhile, the company faces a shortage of skilled labor to work in the U.S. Navy’s Virginia-class attack submarine program. “The supply chain has stumbled a little bit more,” said Aiken.

The company delivered 22 Gulfstream business jets, up from 21 jets a year earlier, showing some signs of supply chain recovery for that segment of the business.

Sales in its aerospace unit rose to $1.86 billion from $1.62 billion a year earlier, while overall revenue fell to $9.19 billion from $9.22 billion.

General Dynamics’ Combat Systems business unit which makes tanks, saw its revenue fall 12% compared to the same period a year ago.

Net earnings rose to $766 million, or $2.75 per share, in the second quarter, from $737 million or $2.61 per share, a year earlier.

Revenues at weapons makers are expected to increase in the coming years as military spending globally spurred by the conflict in Ukraine hits the bottom line.