FINANCE
Poor M&A decisions hit GD's 2012 results
Company reports acquisitions pulled down revenue, earnings
- By Washington Technology staff
- Jan 23, 2013
General Dynamics Corp. is feeling some "buyer’s remorse" as it reports its 2012 results, with the company’s new CEO, Phebe Novakovic, calling some of its acquisitions mistakes.
She called out General Dynamics' information systems and technology segment for making poor acquisition decisions during 2012 that contributed to the company’s poor performance, the Washington Business Journal reported.
Novakovic’s comments came as the company reported that 2012 revenue had fallen 3.6 percent to $31.5 billion, compared to $32.7 billion in 2011. The information systems and technology business segment saw the biggest drop with revenue falling 10.7 percent to $10 billion in 2012, compared to $11.2 billion in 2011.
The IS&T segment is the largest of GD’s four segments. The combat systems and marine systems segments also reported drops in revenue, while the aerospace segment report 15.2 percent growth for the year.
The poor acquisitions decisions by the IS&T segment were the result of “broken internal processes,” Novakovic said. The company will do no more deals until the processes are fixed, the Washington Business Journal reported.