General Dynamics Posts 15 Percent Jump in 1Q Profits
General Dynamics Corp., builder of nuclear submarines, tanks and destroyers, on Wednesday posted a 15 percent jump in first-quarter profits driven by strength in its combat systems and civilian aerospace operations. The company also boosted its full-year profit target on the back of those stronger-than-expected quarterly results, noting the apparent U.S. economic slowdown had not affected sales at its major divisions. General Dynamics, the nation's fourth-largest defense contractor, reported earnings of $212 million, or $1.05 per share, for the quarter, excluding a tax adjustment. After the adjustment, profit totaled $240 million, or $1.19 per share, compared with $184 million, or 91 cents per share, a year ago.
General Dynamics To Buy Newport News Shipbuilding
General Dynamics Corp. said it would buy rival Newport News Shipbuilding Inc. for $2.1 billion in cash, creating the only U.S. builder of aircraft carriers and submarines for the U.S. Navy. General Dynamics' bid comes amid renewed consolidation in the defense industry, following Northrop Grumman Corp.'s $3.8 billion purchase last year of shipbuilder Litton Industries. The deal, if approved by regulators, would leave only two major U.S. contractors for naval military ships. Under terms of the transaction, General Dynamics will pay $67.50 for each of Newport News' 31.9 million shares outstanding and assume about $500 million in Newport News debt. The offer represents a 23 percent premium to Newport News' closing stock price of $55.05 on Tuesday.
