General Dynamics revenue beats on defense demand; supply woes persist
(Reuters) -General Dynamics beat Wall Street expectations for fourth-quarter revenue on Wednesday, as a tense global political climate sustained demand for its military equipment even as supply-chain pressures drove up costs.
Escalating tensions between China and the Philippines, the Russia-Ukraine war and conflicts in the Middle East have boosted orders for U.S. defense firms such as General Dynamics (NYSE:GD), Lockheed Martin (NYSE:LMT) and RTX's defense arm Raytheon (NYSE:RTN).
General Dynamics' Combat Systems unit, which makes tanks, posted a 14.8% rise in revenue from a year earlier.
However, pandemic-related disruptions in labor and ongoing supply-chain snags are hampering efforts to deliver on these record weapons orders and increasing expenses.
Analysts have also raised concerns that supply-related risks are unlikely to dissipate quickly.
Net earnings at the Reston, Virginia-based defense contractor came in at $3.64 per share, below analysts' average estimates of $3.68, according to LSEG data.
The company's quarterly revenue increased 7.5% to $11.7 billion. Analysts on average were expecting $11.4 billion.
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