By Aishwarya Nair and Mike Stone
(Reuters) -Gulfstream jet maker General Dynamics Corp on Wednesday posted a 3.9% rise in second-quarter profit as business jet demand remained strong, but revenues missed forecasts as supply chain problems continued to hamper the defense industry.
Shares were up 1.6% in early trading after the Reston, Virginia-based company posted quarterly revenue of $9.2 billion, a 0.3% drop over last year, missing Wall Street’s $9.4 billion estimate.
Business jet demand in the quarter remained robust as wealthier passengers opted for charter planes to avoid flight cancellations from regular carriers.
Virginia-based General Dynamics reaffirmed expectations it would deliver 123 aircraft in 2022, chief financial officer Jason Aiken said during a call with analysts.
Aiken also flagged a strong growth in flight service activity driving up revenue and the outlook for its aerospace business.
Meanwhile, the company faces a shortage of skilled labor to work in the U.S. Navy’s Virginia-class attack submarine program. “The supply chain has stumbled a little bit more,” said Aiken.
The company delivered 22 Gulfstream business jets, up from 21 jets a year earlier, showing some signs of supply chain recovery for that segment of the business.
Sales in its aerospace unit rose to $1.86 billion from $1.62 billion a year earlier, while overall revenue fell to $9.19 billion from $9.22 billion.
General Dynamics’ Combat Systems business unit which makes tanks, saw its revenue fall 12% compared to the same period a year ago.
Net earnings rose to $766 million, or $2.75 per share, in the second quarter, from $737 million or $2.61 per share, a year earlier.
Revenues at weapons makers are expected to increase in the coming years as military spending globally spurred by the conflict in Ukraine hits the bottom line.
(Reporting by Aishwarya Nair in Bengaluru, Mike Stone in WashingtonEditing by Vinay Dwivedi, Mark Potter and David Gregorio)
