2941 Fairview Park Drive, Suite 100
Falls Church, Virginia 22042-4513
Contact: Rob Doolittle
Tel: (703) 876-3199
General Dynamics Third Quarter Per Share Earnings Increase 20 Percent
FALLS CHURCH, Va., Oct. 15 – General Dynamics (NYSE:GD) today reported 1997 third quarter net earnings of $82 million, or $1.30 per share, on sales of $988 million. This is a per share increase of 20 percent over the third quarter of 1996, when net earnings were $68 million, or $1.08 per share, on sales of $862 million. The quarter ended on September 28, 1997.
For the first nine months of 1997, net earnings were $233 million, or $3.71 per share. This was a per share increase of 17 percent over the first nine months of 1996, when net earnings were $200 million, or $3.16 per share. Nine month 1997 sales were $3 billion, compared with $2.7 billion in the first nine months of 1996.
General Dynamics Chairman and CEO Nicholas D. Chabraja said, "This was an excellent quarter. We are seeing the results of our three part strategy: improve margins, increase revenues, and make strategic acquisitions that will add to earnings growth.
"The defense appropriations bill, signed by the President last week, funds all of our major programs. These core programs - including those in business units we have acquired in the past year -- are vital to the nation's defense, and they received strong bipartisan support.
"On October 1, we completed our acquisition of Lucent Technologies' Advanced Technology Systems [ATS] unit for $284 million," said Chabraja. "ATS reinforces our position as a global leader in total systems integration for marine and ground combat weapons platforms. With expertise in areas such as platform automation; open architecture data networks; the use of commercial components in defense applications; and command, control, communication and intelligence systems, ATS is a superb strategic fit," said Chabraja.
"Even after this acquisition, General Dynamics still has approximately $600 million in cash, virtually no debt, and ample financial capacity. We continue to explore opportunities to enhance our strategic position," he said.
"In the Combat Systems Group, sales were up by 45 percent over the same period last year -- largely due to the purchase of Defense Systems and Armament Systems. In addition, our broader range of products and services gives us further opportunities to enter new markets," said Chabraja.
"We are achieving our goal of becoming a full-line supplier of armored vehicles -- from heavy tanks to light vehicles, and from full platforms to major subsystems. We now have clear leadership in turret, gun and ammunition systems for land, sea and air platforms," said Chabraja.
"Our Marine Group also continued strong performance in the quarter," he said. "Connecticut, the second Seawolf-Class submarine, was christened at Electric Boat on September 1. Ships in the Seawolf Class are the fastest, quietest, most heavily armed attack submarines ever built. The 18th and final ship in the Ohio Class ballistic missile submarine program, Louisiana, was delivered to the Navy on September 6. Development work is proceeding on the New Attack Submarine, which is envisioned as a 30-ship program.
"At Bath Iron Works, the fifteenth ship in the Arleigh Burke Class AEGIS guided missile destroyer was launched on October 4," he said. "In addition, we were pleased to sign a new three-year labor contract with Bath Iron Works' primary union during the quarter."
General Dynamics ended the third quarter of 1997 with a funded backlog of $5.7 billion, and a total backlog of $9.2 billion. Comparable amounts at the end of the third quarter of 1996 were $5.6 billion and $10 billion, respectively.
GENERAL DYNAMICS CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS THIRD QUARTER NINE MONTHS 1997 1996 1997 1996 NET SALES $988 $862 $ 2,961 $ 2,685 OPERATING COSTS AND EXPENSES 875 773 2,632 2,424 OPERATING EARNINGS 113 89 329 261 INTEREST, NET 11 14 28 40 OTHER INCOME (EXPENSES), NET (1) - (4) 2 EARNINGS BEFORE INCOME TAXES 123 103 353 303 PROVISION FOR INCOME TAXES 41 35 120 103 NET EARNINGS $82 $68 $233 $200 NET EARNINGS PER SHARE $1.30 $1.08 $3.71 $3.16 WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS) 62.8 63.1 62.8 63.2 GENERAL DYNAMICS NET SALES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED) DOLLARS IN MILLIONS THIRD QUARTER NINE MONTHS 1997 1996 1997 1996 NET SALES: MARINE GROUP $547 $537 $ 1,693 $1,763 COMBAT SYSTEMS 372 256 1,087 763 OTHER 69 69 181 159 TOTAL $988 $862 $ 2,961 $ 2,685 OPERATING EARNINGS: MARINE GROUP $55 $52 $175 $161 COMBAT SYSTEMS 47 34 133 102 OTHER 11 3 21 (2)
# # #
Any "forward-looking statements" contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For more information, see Forward Looking Statement.