Aerospace group, contract backlog spur spike in GD revenues

General Dynamics Corp. today reported 2010 fourth-quarter earnings of $729 million, or $1.91 per share on a fully diluted basis, compared to 2009 fourth-quarter earnings from continuing operations of $618 million, or $1.58 per share fully diluted.

Full-year 2010 earnings from continuing operations were $2.63 billion, or $6.82 per share, compared to $2.41 billion and $6.20 per share for 2009. Revenue was $8.6 billion in the fourth quarter and $32.5 billion for the full year.

“2010 was a good year for General Dynamics, marked by outstanding earnings growth, efficient cash conversion and focused execution across the company,” said Jay Johnson, chairman and chief executive officer, in the earnings statement.

“Looking ahead, we expect 2011 earnings to be in the range of $7 to $7.10 per share, fully diluted,” Johnson said.

Estimated potential contract value — representing management’s estimate of the value of unfunded indefinite-delivery, indefinite-quantity contracts and unexercised contract options — increased to $21.8 billion at year-end 2010.

Total potential contract value, the sum of all backlog components, was $81.3 billion at the end of the year.

The company’s operating margins increased to 12.5 percent for the fourth quarter, led by a 250-basis-point improvement in the company's Aerospace sector. Margins also increased in the Marine Systems and the Information Systems and Technology businesses and remained steady in Combat Systems, the General Dynamics announcement said.

The total backlog was $59.6 billion at the end of the year, with the Aerospace group having booked its largest order intake of the year, a $244 million increase in backlog over the third quarter.

Significant domestic and international orders for vehicle production and improvements, ongoing ship design and development efforts, and combat mission systems integration work underscored the ongoing demand for many of the company's key product and service offerings, the announcement said.

Net cash provided by operating activities totaled $1.42 billion in the fourth quarter and $2.99 billion for the full year.

Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $1.27 billion in the quarter and $2.62 billion for the year.

General Dynamics, of Falls Church, Va., ranks No. 6 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors.