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(Reuters) -General Dynamics Corp beat Wall Street estimates for quarterly profit on Wednesday as the defense contractor benefited from higher sales in its combat systems and technologies divisions.
As the U.S. budget focuses on pandemic relief, analysts anticipate a near-term slowdown in defense spending. However, defense contractors are expected to continue growing due to sizable backlogs, with defense budget growth likely to return.
Backlog at the end of the second quarter was $89.2 billion, the company said. Sales in the company’s combat systems unit, which makes battle tanks, rose 8.3% to $1.90 billion, while the technologies unit, which provides IT and mission-support services, saw an increase of 3.2% in sales to $3.16 billion.
Net earnings rose to $737 million, or $2.61 per share, in the quarter ended July 4, from $625 million, or $2.18 per share, a year earlier.
Analysts on average expected the company to earn $2.55 per share, according to Refinitiv data.
Revenue fell marginally to $9.22 billion, below estimates of $9.30 billion.
