Before the opening bell, General Dynamics Corporation (GD) reported fourth-quarter EPS of $1.60, sweeping past the Zacks Consensus Estimate by 2 cents. However, it fell 2 cents short of the year-ago result.

In the reported quarter, the company witnessed weak demand for its Gulfstream business jets. However, the company was able to beat market expectations through strong demand from defense-related products.

General Dynamics’ fiscal 2009 earnings of $6.20 beat the Zacks Consensus Estimate of $6.19. However, it came two cents short compared to fiscal 2008 earnings of $6.22.

General Dynamics’ quarterly revenue grew 0.6% year over year to $7.9 billion. During the quarter, General Dynamics witnessed higher top line in Marine Systems (year-over-year growth of 12.4%), Combat Systems (6.6%) and Information Systems & Technology (2.8%). However, Aerospace fell 22.9% year over year. General Dynamics generated revenue of $32 billion in fiscal 2009, beating the fiscal 2008 revenue of $29.3 billion by 9.2%.

General Dynamics’ quarterly operating earnings witnessed tepid growth of 1.4% year over year to $951 million. However, the company witnessed double digit growth in Marine Systems (year-over-year growth of 18.2%), Combat Systems (19.2%) and Information Systems & Technology (11.5%). The growth failed to trickle down due to dismal results at the Aerospace segment, where operating earnings shrunk 36.7% year over year. Operating earnings in Aerospace were bogged down by lower deliveries. The mid-size aircraft was the worst hit with only one delivery in the quarter, compared to the year-ago figure of 21. Meanwhile, large aircraft delivery was 19 in the quarter, compared to 20 in the year-ago period.

General Dynamics generated $2.9 billion in cash from operating activities at the end of fiscal 2009, compared to $3.1 billion reported at the end of fiscal 2008. The company ended fiscal 2009 with cash and cash equivalents of $2.3 billion, compared to $1.6 billion at year-end fiscal 2008. Long term debt increased to $3.2 billion at the end of fiscal 2009 from $3.1 billion at the end of fiscal 2008.

General Dynamics maintained its brisk pace in order booking, taking the total backlog at the end of the quarter to $65.5 billion. This was due to increases in Aerospace and Combat Systems segmental order backlogs. The company expects its fiscal 2010 earnings in the range of $6.40 – $6.50 per share.

Zacks Investment Research

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