Charge, govt spending cuts hammer Gen Dynamics results
Weapons and aircraft maker General Dynamics Corp reported a loss from continuing operations and lower-than-expected revenue in the fourth quarter of 2012, as declining demand and shrinking government orders hammered the company's results.
Its shares recovered a bit after falling nearly 5 percent in early trading on Wednesday.
The company, which builds warships, ground combat vehicles and business jets, reported a quarterly loss from continuing operations of $2.1 billion, or $6.07 per share. The company said the loss was mainly due to a $2 billion noncash charge in its information systems business, reflecting lower U.S. defense spending. It posted a profit of $603 million in the year-earlier period.
On an adjusted basis, earnings per share dropped to $1.39, down from $1.68 in the year-earlier period.
General Dynamics also took $867 million in other charges, including $301 million in its aerospace and information systems businesses, in the quarter, the company said.
Revenue declined nearly 12 percent in the quarter, dropping to $8.08 billion from $9.15 billion, and missing analysts' forecasts of $8.8 billion. Three of the company's four divisions reported lower revenue in the fourth quarter, and the aerospace division saw a sales increase of only a 0.2 percent.
For full-year 2012, the company reported a net loss from continuing operations of $332 million, a huge swing from a profit of $2.55 billion a year earlier. That resulted in a net loss per share of 94 cents, down from a net profit per share of $6.94 in 2011.
Adjusted for the charge, full-year earnings were $2.3 billion, or $6.48 per share, the company said.
Chief Executive Phebe Novakovic, who took over on Jan. 1, said the fourth-quarter charges and the full-year loss reflected contracting markets and a decline in government spending in the United States and overseas.
The results also pointed to the need for improvement in some areas, and she said said the company would continue to manage its business aggressively.
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