Jan. 22 (Bloomberg) -- General Dynamics Corp., the U.S. government’s No. 3 contractor, reported a fourth-quarter profit compared with a loss in the same period last year, boosted by its aerospace unit’s performance.
Net income was $495 million, or $1.40 a share, compared with a $2.13 billion loss a year earlier when General Dynamics posted a $2 billion goodwill writedown, according to a statement today by the Falls Church, Virginia-based company. After one- time items, per-share profit was $1.76, beating the $1.75 average estimate of 13 analysts surveyed by Bloomberg.
Sales rose less than 1 percent to $8.11 billion in the quarter from the year-earlier period.
General Dynamics, the maker of Abrams tanks and Gulfstream business jets, is the first among the top five Pentagon vendors to report fourth-quarter earnings this month. The biggest, Lockheed Martin Corp., announces its results tomorrow.
While the company didn’t provide estimates for full year 2014 profit and sales, investors in defense companies will be reacting to guidance and management “tone,” Credit Suisse analysts in New York said in a note to clients last week.
Automatic federal-government spending cuts, known as sequestration, were eased by an agreement in Congress last month, which may provide some relief to contractors.
The Credit Suisse analysts, including Robert Spingarn, predicted minimal effects from October’s partial government shutdown because “any lost revenue was likely recovered before quarter-end.”
General Dynamics fell less than 1 percent to $95.30 yesterday in New York trading. It gained 35 percent in the 12 months through yesterday, outpacing the Standard & Poor’s 500 Index’s gain of 24 percent.
The loss in last year’s fourth quarter was primarily attributed to General Dynamics cutting the goodwill value of its Information Systems and Technology unit by $2 billion because of the segment’s declining revenue.