(Reuters) -Surging demand for private jets fueled by hopes of economic recovery following mass COVID-19 vaccinations helped lift defense contractor General Dynamics Corp’s revenue in results posted on Wednesday.
Shares rose more than 1% in morning trading to a 14-month high after the Gulfstream jet maker posted a 7% rise in first-quarter revenue as its aerospace unit’s sales picked up.
The company’s business jet deliveries increased to 28 units from 23 a year earlier, amid increased coronavirus inoculations and easing travel restrictions.
Private jet “sales activity truly accelerated in the middle of February and continued on through the remainder of the quarter,” General Dynamics Chief Executive Phebe Novakovic told analysts on a post-earnings call.
While General Dynamics’ aerospace segment saw a slump during the global health crisis last year as its supply chain struggled, the company’s bottom-line was buoyed by its robust defense unit. In 2020, 69% of its consolidated revenue was from the U.S. government.
In the quarter, revenue across all four of its business segments was up compared with the same period last year when the first impacts of the pandemic were felt.
Revenue in the company’s aerospace unit rose to $1.89 billion for the first quarter from $1.69 billion a year earlier, while overall revenue rose to $9.39 billion, which was above Wall Street expectations of $8.88 billion and up from $8.75 billion a year earlier.
Marine Systems revenue was up 10.6% compared with a year ago, after a $1.9 billion award from the U.S. Navy for the construction of a tenth Virginia-class submarine.
Net earnings rose marginally to $708 million, or $2.48 per share beating Wall Street estimates of $2.30 and up from $706 million, or $2.43 per share, a year earlier.
(Reporting by Shreyasee Raj in Bengaluru and Mike Stone in Washington; Editing by Ramakrishnan M. and Steve Orlofsky)
