General Dynamics slumps to 9-month low as profit, aerospace revenue stalls (NYSE:GD)

General Dynamics (NYSE:GD) shares on Wednesday fell as much as 5.7% to a nine-month low after the aerospace and defense company reported a profit that was little changed from a year ago and flat sales for its business that makes private jets.

Revenue rose 5.2% from a year earlier to $9.88 billion in Q1, beating the average estimate among Wall Street analysts of $9.30 billion. Its profit of $730 million was little changed from a year earlier, while EPS of $2.64 beat the consensus estimate of $2.58.

Its set-aside for income tax climbed 26% from a year earlier to $150 million.

“Our businesses delivered solid operating results despite persistent supply chain headwinds, with earnings before taxes up 3.7% and EPS up modestly,” Phebe N. Novakovic, chairman and CEO of General Dynamics (GD), said in a statement. “Strong cash flow positions us to continue to invest in our business, retire debt and return value to shareholders.”

Gains its marine systems, combat systems and technologies segments drove sales growth. Revenue for its aerospace business, which makes Gulfstream jets, slipped less than 1% to $1.89 billion while operating earnings fell 5.8% to $229 million.

The marine systems segment that makes ships and nuclear-powered submarines for the U.S. Navy boosted revenue by 13% from a year earlier to $2.99 billion.

The company’s consolidated book-to-bill ratio, which consists of orders divided by revenue, was 0.9-to-1 for the quarter. General Dynamics’ backlog rose 3% from a year earlier to $89.8 billion.

During the quarter, the U.S. Defense Department awarded the company with a $1.1 billion contract to make and support Abrams tanks, Stryker combat vehicles and other armored vehicles for the U.S. Army and countries such as Poland and Colombia.

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