Top defense contractors report sales growth

January 30, 2019

By Marjorie Censer

General Dynamics said today it recorded $10.4 billion in sales during its most recent quarter, marking a 25 percent boost over the same three-month period a year earlier.

The contractor's quarterly profit hit $909 million, up 43 percent from the prior year.

In 2018, General Dynamics' sales totaled $36.2 billion, up 17 percent from 2017. Profit hit $3.3 billion, up almost 15 percent from a year earlier.

The contractor said its 2017 results were dampened by a one-time, non-cash charge related to tax legislation.

In a call with analysts this morning, Phebe Novakovic, General Dynamics' chief executive, said she hasn't seen defense spending affected by the recent political debate over spending.

"In fact, defense spending has been increasing in this environment," she said. "I haven't seen too much perturbation as a result of some of the extant issues with respect to the overall budget."

Boeing records revenue growth

Boeing, meanwhile, said today that quarterly sales in its defense, space and security business hit $6.1 billion, up 16 percent from a year earlier, "driven by increased volume across F/A-18, satellites, and weapons," the company said.

The unit's quarterly profit reached $669 million, up 23 percent from the same three-month period a year earlier.

For the year, Boeing's defense business recorded $23.2 billion in sales, up 13 percent from 2017. However, the unit's 2018 profit reached $1.6 billion, down 27 percent from the prior year.

Oshkosh sees decline

Meanwhile, Oshkosh reported today that sales in the most recent quarter in its defense business reached $464 million, down 6 percent from the same three-month period a year earlier.

"The decrease in sales was due to the absence of international Mine Resistant Ambush Protected-All Terrain Vehicle (M-ATV) sales in the first quarter of fiscal 2019, offset in part by the continued ramp up of sales to the U.S. government under the [Joint Light Tactical Vehicle] program and changes associated with the application of the new revenue recognition standard," the company said.

The unit's quarterly profit hit $71 million, up 8 percent from the prior year.

The increase, Oshkosh said, was a result of "changes associated with the application of the new revenue recognition standard, including an increase in contract margins on the JLTV program upon the receipt of the large order in the quarter, and a favorable resolution of contract compliance matters."