UPDATE 2-General Dynamics profit beats estimates as military sales rise

(Adds context, details on combat systems)

Jan 24 (Reuters) - Aerospace and defense company General Dynamics Corp beat expectations for fourth-quarter profit on Wednesday, helped by higher sales for its combat systems unit that makes tanks.

Although revenue grew to $8.28 billion from $7.65 billion last year, it was below expectations for $8.38 billion.

The company's shares fell 1.68 percent to $204.00 in premarket trading.

Sales in the tank-making combat systems unit rose 7.6 percent to $5.95 billion. In December, the General Dynamics unit was awarded a $2.6 billion contract for upgrading M1A1 configured Abrams vehicles and for upgrading M1A1 vehicles.

Sales in the aerospace division, its biggest, rose 4 percent to $8.13 billion as it delivered 30 Gulfstream aircraft in the quarter, up from 28 a year earlier.

General Dynamics is expected to benefit from a move by the U.S. military to increase spending after Defense Secretary Jim Mattis unveiled the "National Defense Strategy" on Friday that put countering China and Russia at the center of a new strategy.

Shares of U.S. defense companies have rallied since November on U.S. President Donald Trump's election promise to spend more on defense.

Earnings from continuing operations rose to $636 million, or $2.10 per share, in the quarter ended Dec. 31, from $570 million, or $1.89 per share, a year earlier.

The company recorded a $119 million one-time, non-cash charge in the quarter related to U.S. tax changes. (Reporting by Mike Stone in Washington and Arunima Banerjee in Bengaluru; Editing by Arun Koyyur and Bernadette Baum)