General Dynamics today said sales and profit rose last year, buoyed by the company's aerospace and combat systems businesses.
The contractor reported 2017 sales of nearly $31 billion, up 1 percent from the prior year. General Dynamics' profit reached $2.9 billion for the year, up 13 percent from 2016.
The aerospace business in 2017 saw a 4 percent boost in sales and a roughly 13 percent increase in profit. The company's combat systems unit reported a nearly 8 percent increase in sales and an almost 13 percent boost to profit.
"The group received multiple significant contracts in 2017, including awards to modernize Abrams tanks for the U.S. Army and its allies and several orders across our European vehicle business," General Dynamics said.
During its most recent quarter, General Dynamics said it recorded a $119 million one-time, non-cash reduction to earnings because of the new tax reform legislation, "primarily a provision that reduces the value of a future deferred tax."
Phebe Novakovic, General Dynamics' chief executive, told analysts during a Wednesday morning call the contractor will turn to its usual strategies to use the increased cash provided by tax reform.
"First, we invest in our business where we believe we can get a good return," she said. "We're in a period right now of growth that needs to be supported by investments."
In particular, Novakovic said the company is investing in its shipyards.
Additionally, she said General Dynamics then looks for acquisitions and then to dividends.
"The only long-term, steady, reliable, repeatable element of cash and capital deployment [is] dividends," Novakovic told analysts. "I don't see a particular change in the strategy. The tactics, of course, are driven by the needs of the business."