General Dynamics Corp., maker of tanks, ships and Gulfstream business jets, reported slightly higher first quarter earnings from a year ago, although projected sales fell short of expectations.
The company had net earnings of $571 million for the first three months of 2013, compared to net earnings of $564 million in the first quarter of 2012.
Revenues dropped from $7.58 billion to $7.4 billion.
General Dynamics CEO Phebe Novakovic took the reins of the company Jan. 1 and instituted a series of management changes designed to cut costs and improve margins. In a conference call with analysts Wednesday, she called the first quarter results “a strong start to the year.”
The company’s aerospace segment, which consists of Savannah-based Gulfstream Aerospace and Jet Aviation — its maintenance and completions business, reported revenues of $1.77 billion for the quarter, a 9 percent increase from the first quarter of 2012.
Earnings were up 14 percent, from $271 million to $310 million, and margins increased from 16.7 percent to 17.4 percent. The company’s backlog of business jets stands at $15.2 billion.
Novakovic characterized the company’s aerospace segment as “so far, so good” for 2013.
“Our order mix is improving, and the backlog of orders for the large cabin G550 and G445 is where we want it,” she said.
“In general, we’re comfortable with both our backlog and new order activity.”
Gulfstream had 30 “green deliveries” in the first quarter — 25 of them large cabin — compared to 28 in the same quarter last year, 26 of them large-cabin aircraft.
A green aircraft is one that has completed the initial phase of manufacturing and has received a certificate of airworthiness from the Federal Aviation Administration. It’s called “green” because it’s covered with a green protective coating that is washed off before the aircraft gets its final coat of paint.
Green aircraft are delivered to one of five Gulfstream completion centers to be fitted with interiors and painted before final delivery to the customer.
Gulfstream delivered 29 outfitted airplanes in the first quarter this year, compared to 19 in the same period in 2012.
Asked if Gulfstream had any plans to update or replace the G450 and/or G550, Novakovik offered no specifics.
“As you know, we have a disciplined research and development program ongoing,” she said. “As far as announcing a potential new plane, we will when we are ready.
“We aren’t there yet, and I’m not going to speculate.”
GULFSTREAM BY THE NUMBERS
Category 1Q 2012 1Q 2013
Revenues $1.62 billion $1.77 billion
Earnings $271 million $310 million
Operating margins 16.7 percent 17.4 percent
Total backlog $16.9 billion $15.2 billion
Green deliveries 28 30
Outfitted deliveries 19 29