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General Dynamics profit jumps 42%, jet orders rise

A Gulfstream G280 jet, by Gulfstream Aerospace Corp., a unit of General Dynamics.
Brent Lewin | Bloomberg | Getty Images
A Gulfstream G280 jet, by Gulfstream Aerospace Corp., a unit of General Dynamics.

General Dynamics, maker of Gulfstream jets, tanks and U.S. Navy ships, reported a 42 percent jump in fourth-quarter profit and said quarterly aircraft orders were at their highest in more than three years.

The company said operating margins rose to 12.8 percent in the quarter from 11.5 percent a year earlier.

Weapons makers in the United States have cut costs to increase profitability in the face of lower defense spending. They have also held up their stock prices by returning cash to shareholders through buybacks and strong dividends.

General Dynamics said on Wednesday it returned about $4.2 billion to shareholders through stock repurchases and dividends in 2014, more than triple the amount paid the previous year.

Lockheed Martin Corp, which reported an 8.6 percent rise in quarterly revenue on Tuesday, said it planned to return at least $2 billion through stock buyback in 2015.

General Dynamics' net income rose to $701 million, or $2.09 per share, in the fourth quarter, from $495 million, or $1.40 per share, a year earlier.

Revenue increased 4 percent to $8.36 billion.

Analysts on average expected revenue of $8.04 billion, according to Thomson Reuters I/B/E/S.

General Dynamics shares had risen about 37 percent in the past 52 weeks up to Tuesday's close $137.20, outperforming a 27 percent rise in the Dow Jones U.S. Defense index, which covers the 10 biggest aerospace and defense companies.