Gulfstream a ‘Growth Engine’ at General Dynamics
With defense spending remaining a target of increased budget scrutiny, General Dynamics chairman and CEO Jay Johnson said yesterday that he sees the company’s Gulfstream Aerospace division as its main “growth engine.” During the first-quarter investor conference call yesterday morning, Johnson said the firm’s aerospace division, which includes Gulfstream and Jet Aviation, had a “strong quarter” with $1.353 billion in revenues, just $4 million less than a year ago. Despite this, first-quarter profits at the division climbed to $230 million, $12 million higher than last year. Johnson said the results reflect “robust demand for new aircraft and aircraft services” at Gulfstream and healthier service demand at Jet Aviation. However, Jet Aviation’s performance was offset as its “completions business remained challenged due to lower OEM completions volume, following the economic downturn and throughput delays.” Overall, “We continue to see improved conditions in the business aviation market,” Johnson said, citing “healthy” new aircraft order interest, particularly from the international market and specifically Asia Pacific; declining pre-owned inventory levels; and increased aftermarket demand spurred by rising aircraft utilization. During the quarter, Gulfstream delivered 24 completed jets (19 large-cabin and five midsize jets), compared with 17 (16 large, one midsize) in the same period last year. The aerospace division’s backlog at the end of the quarter was $17.860 billion, up from $17.821 billion at the end of last year.