General Dynamics Continues Trend Of Strong Earnings

(MoneyWatch)  General Dynamics (GD) reported their first quarter earnings. Like Lockheed, Raytheon and Northrop Grumman this large defense contractor had a good quarter. Earnings per share were up twelve cents when compared to 2008.

So far only Boeing has reported a net loss for the quarter, although Lockheed was helped by the buy back of its shares. Boeing has been hurt by the downturn in the civil aviation business due to the world's economic decline.

GD did well on their ship and submarine construction business. The defense part of their core businesses helped offset some issues with their business jet production. GD is comfortable right now with the direction of the Obama administration's plans for the defense budget, especially the substitution of DDG-51 ships for the DDG-1000 program. Of course Congress has not weighed in on the final budget and if the DDG-1000 continues it will only aid the company.

With the cancellation of the wheeled vehicle portion of the Future Combat Systems (FCS) there are also opportunities for more Stryker vehicle production to offset these requirements.

It will be interesting to compare the results for the first quarter of 2010 as the new administration's budget takes hold. As when any major adjustment is done to the U.S. defense budget opportunities are created as well as ended. It will be interesting to compare the first quarter of 2010 with these reports as the new budget takes hold.