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July 19, 2006 |
| P.O. Box 2074 | Contact: Rob Doolittle |
| Warren, MI 48090-2074 | Tel: 703 876 3199 |
| www.gdls.com | Fax: 703 876 3555 |
| rdoolitt@generaldynamics.com |
- Revenues grow 15.5 percent
- EPS from continuing operations increases 24 percent
- Full-year EPS guidance updated
FALLS CHURCH, Va. - General Dynamics (NYSE: GD) today reported 2006 second-quarter revenues of $5.9 billion, a 15.5 percent increase over second-quarter 2005 revenues of $5.1 billion. Earnings from continuing operations in the quarter increased to $420 million, or $1.03 per share on a fully diluted basis, compared to 2005 second-quarter earnings from continuing operations of $338 million, or $0.83 per share fully diluted. (All per-share data has been adjusted to reflect a two-for-one stock split that occurred March 24, 2006.)
General Dynamics also reported $216 million in earnings from discontinued operations, which include a gain on the sale of certain non-core assets. Net earnings, including discontinued operations, were $636 million for second-quarter 2006, or $1.56 per share on a fully diluted basis. In comparison, net earnings for the second quarter of 2005 were $345 million, or $0.85 per share fully diluted.
Funded backlog at the end of the second quarter was $30.5 billion, and total backlog was $42.4 billion, compared to $29.2 billion and $41.6 billion, respectively, at the end of the first quarter of 2006.
For the first half of 2006, net cash provided by operating activities was $793 million, while free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $664 million.
The company's second-quarter 2006 results were driven largely by sales growth in the Aerospace and Combat Systems groups, and operating earnings growth in Aerospace, Combat Systems and Marine Systems. Information Systems and Technology, Combat Systems and Aerospace generated strong orders as well, increasing their backlog significantly in the quarter.
"General Dynamics once again has delivered strong results," said Nicholas D. Chabraja, General Dynamics chairman and chief executive officer. "Sales and operating earnings increased in all four business segments compared to the year-ago period, year-to-date cash generation continues to meet our expectations and funded backlog grew by $1.3 billion quarter-over-quarter.
"We now expect 2006 earnings from continuing operations to be approximately $4.15 per share, fully diluted," Chabraja said.
General Dynamics, headquartered in Falls Church, Va., employs approximately 81,900 people worldwide. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation.
Certain statements made in this press release, including any statements as to future results of operations and financial projections, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management's current expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company's filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K and our Forms 10-Q.
All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
WEBCAST INFORMATION: General Dynamics will webcast its second-quarter securities analyst conference call, scheduled for 11 a.m. Eastern Daylight Time on Wednesday, July 19, 2006. Those accessing the webcast will be able to listen to management's discussion of the second-quarter results, as well as the question-and-answer session with securities analysts.
The webcast will be a listen-only audio broadcast, available at www.generaldynamics.com. A Real Audio(tm) player or Windows Media(tm) player is required to access the webcast; information about downloading those players is available on the company's website. An on-demand replay of the webcast will be available by 2 p.m. on July 19 and will continue to be available for 12 months.
To hear a recording of the conference call by telephone, please call 719-457-0820; passcode 5004149. The telephone replay will be available from 2 p.m. on July 19 until midnight on August 2, 2006.
