General Dynamics profit beats estimates on military equipment demand

(Reuters) -Defense contractor General Dynamics Corp (NYSE:) on Wednesday reported a better-than-expected quarterly profit, helped by resilient demand for military equipment, sending its shares up 2% in premarket trading.

General Dynamics benefited from robust demand for weapons, driven by simmering geopolitical tensions in the Indo-Pacific region, conflict in Ukraine and military modernization efforts of ally countries.

Revenue at the marine systems segment, which makes ships in addition to submarines, rose 15.4%, boosted by a $1.1 billion contract from the U.S. Navy for long-lead materials and the advance construction for Block V Virginia-class submarines.

Demand for business jets, which surged during the pandemic as wealthy passengers sought to avoid COVID restrictions, remains buoyant despite the recovery in commercial flights.

The aerospace segment booked $2.5 billion in new orders during the quarter, driven by strong demand for the company’s Gulfstream business aircraft.

Gulfstream deliveries in the second quarter were at 24 jets, compared with 22 in the same period a year ago.

The company reported a backlog of $91.4 billion, compared to $87.6 billion. Its book-to-bill ratio, which is the ratio of orders received to units shipped and billed, was 1.2-to-1.

Total revenue at the Reston, Virginia-based company rose 10.5% to $10.15 billion.

Net earnings came in at $744 million, or $2.70 per share, in the quarter ended July 2, compared with $766 million, or $2.75 per share, a year earlier.