General Dynamics profit up

General Dynamics Corp., the largest maker of armored vehicles for the U.S. military and the parent of Electric Boat, said third- quarter profit gained 24 percent as it sold more blast-resistant trucks and armored transports for the war in Iraq.
The company also raised its 2007 profit forecast.
Profit from continuing operations climbed to $544 million, or $1.34 a share, from $440 million, or $1.08, a year earlier, the Falls Church, Va.-based company said Wednesday. Sales rose 13 percent to $6.83 billion, aided also by demand for Gulfstream business jets. Sales and profit both beat analysts’ projections.
General Dynamics, the maker of Stryker troop transports and Abrams tanks, is boosting sales as it wins work to repair or replace vehicles which have seen combat in Iraq. That helped lift combat systems sales 37 percent in the quarter. CEO Nicholas Chabraja also expanded into trucks by forming a joint venture with Force Protection Inc. in December to build Cougar vehicles with blast-deflecting V-shaped hulls.
“General Dynamics should benefit from high armored vehicle demand through its work on Abrams and Stryker as well as its partnerships” for the U.S. Mine-Resistant, Ambush-Protected vehicle program, wrote Joseph Nadol, a New York-based analyst with J.P. Morgan Securities Inc., in an Oct. 22 note to clients.
The average of 16 analyst estimates compiled by Bloomberg was for earnings of $1.25 a share. Analysts, on average, projected that sales would gain 12 percent to $6.79 billion, from $6.07 billion.
General Dynamics announced last year it would sell its Freeman Energy coal mining unit. Since then, it has reported the division as a discontinued operation. The sale was completed in August for undisclosed terms, spokesman Robert Doolittle said.
Including the divested coal business, General Dynamics said net income in the quarter rose to $546 million, or $1.34 a share, from $438 million, or $1.08 a share.
General Dynamics raised its forecast for 2007 per-share profit from continuing operations to a range of $5 to $5.05 from a July forecast of $4.85 to $4.90. The company didn’t supply a new sales forecast beyond the July projection of $27 billion, Doolittle said.
Analysts, on average, project the company will earn $4.94 this year, on sales of $27.1 billion.
The U.S. Defense Department is rushing blast-resistant trucks to Iraq to protect troops from homemade bombs, which are the leading cause of combat deaths among American forces. The Pentagon will buy as many as 6,500 more MRAP trucks in December, bringing the total number of vehicles on order to more than 15,000.
In July, General Dynamics won a $111.5 million order from Ladson, S.C.-based Force Protection to build 235 vehicles for the MRAP program.
In addition to its work with Force Protection, General Dynamics also has it own MRAP vehicle called the RG-31. In August, General Dynamics won a $338.7 million order to produce 600 of those vehicles. •