General Dynamics First Quarter Per Share Earnings Increase 15 Percent

Apr 18, 2001, 01:00 ET from General Dynamics

    FALLS CHURCH, Va., April 18 /PRNewswire/ -- General Dynamics (NYSE:   GD)
 today reported net earnings of $240 million, or $1.19 per share on a fully
 diluted basis, on sales of $2.7 billion for the first quarter of 2001, which
 ended on April 1.  Included in these earnings was a gain of $28 million or 14
 cents per share from a tax-related adjustment.  Excluding the tax adjustment,
 earnings totaled $212 million or $1.05 per share on a fully diluted basis.
 This is a per-share increase of 15 percent over the first quarter of 2000,
 when earnings were $184 million, or 91 cents per share, on sales of  $2.5
 billion.
     "The year is off to a strong start. In addition to solid earnings
 performance, we had free cash flow of $149 million from our business units,"
 said Nicholas D. Chabraja, General Dynamics chairman and CEO.  "We also
 strengthened the corporation by increasing total backlog by $1.3 billion over
 year end," he said.
    The company ended the first quarter of 2001 with a funded backlog of $15
 billion, and a total backlog of $21 billion.
     "The outlook for our Combat Systems group is particularly bright,"
 Chabraja said.  "Combat Systems' sales for the first quarter were up 39
 percent compared with the first quarter of 2000, and earnings increased by 30
 percent, reflecting in part the acquisition of Ordnance and Tactical Systems
 at the end of January.  On April 9, the Government Accounting Office upheld
 the award of a $4 billion contract to a General Dynamics/General Motors
 partnership to build 2,131 medium weight armored vehicles for the U.S. Army's
 Brigade Combat Team.  We're already back to work on this important program.
     "On March 30, the Army awarded General Dynamics a multiyear contract worth
 $741 million to deliver 307 M1A2 Abrams upgrade tanks with the System
 Enhancement Package.  This work will be performed from August 2001 through the
 end of 2004," he said.
     "The Aerospace group, which set an all-time record for new orders in 2000,
 started off the year with another strong showing.  Aerospace backlog increased
 by more than $300 million during the quarter.  First quarter 2001 earnings
 were up by 10 percent compared with the first quarter of 2000 as Gulfstream
 continues to become more efficient through manufacturing process
 improvements," Chabraja noted.
     "As we look ahead, we will keep all of our businesses focused on cash
 generation and steady operating improvements," said Chabraja.  "We continue to
 have a very strong balance sheet -- and we are well positioned to make further
 acquisitions that will strengthen our company and build additional value for
 our shareholders."
     On March 7, 2001, based on expectations of continuing strong cash flows,
 the General Dynamics board of directors increased the regular quarterly
 dividend by 8 percent to 28 cents per share.
 
     General Dynamics, headquartered in Falls Church, Virginia, employs
 approximately 46,000 people worldwide and anticipates 2001 sales of
 approximately $11.5 billion.  The company has leading market positions in
 business aviation, information systems, shipbuilding and marine systems, and
 land and amphibious combat systems.  More information about the company can be
 found on the World Wide Web at http://www.generaldynamics.com .
 
                 Consolidated Statement of Earnings (Unaudited)
                (Dollars in Millions, Except Per Share Amounts)
 
                                                   First Quarter
                                                  2001      2000
     Net sales                                  $2,673    $2,546
     Operating costs and expenses                2,339     2,240
 
     Operating earnings                            334       306
 
     Interest, net                                 (12)      (19)
 
     Other income (expense), net                     8        (1)
 
     Earnings before income taxes                  330       286
 
     Provision (benefit) for income taxes:
       Provision                                   118       102
       Tax reserve adjustment                      (28)       --
 
     Net earnings                                 $240      $184
 
     Earnings per share basic -- before
      tax reserve adjustment                     $1.06     $0.92
 
     Earnings per share basic -- after
      tax reserve adjustment                     $1.20     $0.92
 
     Basic common weighted average shares
      outstanding (in millions)                  200.4     200.9
 
     Earnings per share diluted-before tax
      reserve adjustment                          1.05     $0.91
 
     Earnings per share diluted-after tax
      reserve adjustment                         $1.19     $0.91
 
     Diluted common weighted average shares
      outstanding (in millions)                  202.2     202.3
 
 
            Net Sales and Operating Earnings by Segment (Unaudited)
                             (Dollars in Millions)
 
                                              First Quarter
                                             2001       2000
     Net sales:
        Marine Systems                       $862       $846
        Aerospace                             712        730
        Information Systems
         and Technology                       612        606
        Combat Systems                        438        315
        Other                                  49         49
 
     Total                                 $2,673     $2,546
 
     Operating Earnings:
        Marine Systems                        $80        $88
        Aerospace                             144        131
        Information Systems
         and Technology                        60         58
        Combat Systems                         48         37
        Other                                   2         (8)
 
     Total                                   $334       $306
 
                                Conference Call
                      First Quarter 2001 Financial Results
 
     Nicholas D. Chabraja, chairman and CEO; Michael J. Mancuso, senior vice
 president and chief financial officer; and Ray Lewis, staff vice president-
 investor relations, will review first quarter results and answer questions
 from financial analysts at 11:00 a.m. ET on Wednesday, April 18, 2001.
     A webcast of the conference will available over the Internet, as a listen-
 only audio broadcast, at http://www.generaldynamics.com .
     A Real Audio player or Windows Media(TM) player is required to access the
 webcast; information about downloading those players is available on the
 company's website.
     A replay of the conference will be available from April 18 at 2:00 p.m.
 until May 2 at 11:59 p.m. by calling 703-925-2533, passcode 5137276.
 
 

SOURCE General Dynamics
    FALLS CHURCH, Va., April 18 /PRNewswire/ -- General Dynamics (NYSE:   GD)
 today reported net earnings of $240 million, or $1.19 per share on a fully
 diluted basis, on sales of $2.7 billion for the first quarter of 2001, which
 ended on April 1.  Included in these earnings was a gain of $28 million or 14
 cents per share from a tax-related adjustment.  Excluding the tax adjustment,
 earnings totaled $212 million or $1.05 per share on a fully diluted basis.
 This is a per-share increase of 15 percent over the first quarter of 2000,
 when earnings were $184 million, or 91 cents per share, on sales of  $2.5
 billion.
     "The year is off to a strong start. In addition to solid earnings
 performance, we had free cash flow of $149 million from our business units,"
 said Nicholas D. Chabraja, General Dynamics chairman and CEO.  "We also
 strengthened the corporation by increasing total backlog by $1.3 billion over
 year end," he said.
    The company ended the first quarter of 2001 with a funded backlog of $15
 billion, and a total backlog of $21 billion.
     "The outlook for our Combat Systems group is particularly bright,"
 Chabraja said.  "Combat Systems' sales for the first quarter were up 39
 percent compared with the first quarter of 2000, and earnings increased by 30
 percent, reflecting in part the acquisition of Ordnance and Tactical Systems
 at the end of January.  On April 9, the Government Accounting Office upheld
 the award of a $4 billion contract to a General Dynamics/General Motors
 partnership to build 2,131 medium weight armored vehicles for the U.S. Army's
 Brigade Combat Team.  We're already back to work on this important program.
     "On March 30, the Army awarded General Dynamics a multiyear contract worth
 $741 million to deliver 307 M1A2 Abrams upgrade tanks with the System
 Enhancement Package.  This work will be performed from August 2001 through the
 end of 2004," he said.
     "The Aerospace group, which set an all-time record for new orders in 2000,
 started off the year with another strong showing.  Aerospace backlog increased
 by more than $300 million during the quarter.  First quarter 2001 earnings
 were up by 10 percent compared with the first quarter of 2000 as Gulfstream
 continues to become more efficient through manufacturing process
 improvements," Chabraja noted.
     "As we look ahead, we will keep all of our businesses focused on cash
 generation and steady operating improvements," said Chabraja.  "We continue to
 have a very strong balance sheet -- and we are well positioned to make further
 acquisitions that will strengthen our company and build additional value for
 our shareholders."
     On March 7, 2001, based on expectations of continuing strong cash flows,
 the General Dynamics board of directors increased the regular quarterly
 dividend by 8 percent to 28 cents per share.
 
     General Dynamics, headquartered in Falls Church, Virginia, employs
 approximately 46,000 people worldwide and anticipates 2001 sales of
 approximately $11.5 billion.  The company has leading market positions in
 business aviation, information systems, shipbuilding and marine systems, and
 land and amphibious combat systems.  More information about the company can be
 found on the World Wide Web at http://www.generaldynamics.com .
 
                 Consolidated Statement of Earnings (Unaudited)
                (Dollars in Millions, Except Per Share Amounts)
 
                                                   First Quarter
                                                  2001      2000
     Net sales                                  $2,673    $2,546
     Operating costs and expenses                2,339     2,240
 
     Operating earnings                            334       306
 
     Interest, net                                 (12)      (19)
 
     Other income (expense), net                     8        (1)
 
     Earnings before income taxes                  330       286
 
     Provision (benefit) for income taxes:
       Provision                                   118       102
       Tax reserve adjustment                      (28)       --
 
     Net earnings                                 $240      $184
 
     Earnings per share basic -- before
      tax reserve adjustment                     $1.06     $0.92
 
     Earnings per share basic -- after
      tax reserve adjustment                     $1.20     $0.92
 
     Basic common weighted average shares
      outstanding (in millions)                  200.4     200.9
 
     Earnings per share diluted-before tax
      reserve adjustment                          1.05     $0.91
 
     Earnings per share diluted-after tax
      reserve adjustment                         $1.19     $0.91
 
     Diluted common weighted average shares
      outstanding (in millions)                  202.2     202.3
 
 
            Net Sales and Operating Earnings by Segment (Unaudited)
                             (Dollars in Millions)
 
                                              First Quarter
                                             2001       2000
     Net sales:
        Marine Systems                       $862       $846
        Aerospace                             712        730
        Information Systems
         and Technology                       612        606
        Combat Systems                        438        315
        Other                                  49         49
 
     Total                                 $2,673     $2,546
 
     Operating Earnings:
        Marine Systems                        $80        $88
        Aerospace                             144        131
        Information Systems
         and Technology                        60         58
        Combat Systems                         48         37
        Other                                   2         (8)
 
     Total                                   $334       $306
 
                                Conference Call
                      First Quarter 2001 Financial Results
 
     Nicholas D. Chabraja, chairman and CEO; Michael J. Mancuso, senior vice
 president and chief financial officer; and Ray Lewis, staff vice president-
 investor relations, will review first quarter results and answer questions
 from financial analysts at 11:00 a.m. ET on Wednesday, April 18, 2001.
     A webcast of the conference will available over the Internet, as a listen-
 only audio broadcast, at http://www.generaldynamics.com .
     A Real Audio player or Windows Media(TM) player is required to access the
 webcast; information about downloading those players is available on the
 company's website.
     A replay of the conference will be available from April 18 at 2:00 p.m.
 until May 2 at 11:59 p.m. by calling 703-925-2533, passcode 5137276.
 
 SOURCE  General Dynamics