By Tess Stynes
General Dynamics Corp.'s (GD) third-quarter earnings rose 8.5% as improved margins helped the defense contractor offset slightly weaker sales.
Defense-sector revenue remains under pressure from weaker defense spending, which has been compounded by further U.S. government-spending cuts known as the sequester that went into force during March and concerns about any further cuts in the future.
Like many defense companies, General Dynamics has been aiming to reduce costs to help cope with weakened domestic defense budgets, while also working to strengthen its information-technology business, its biggest source of revenue.
General Dynamics reported a profit of $651 million, or $1.84 a share, up from $600 million, or $1.70 a share, a year earlier. Revenue decreased 1.7% to $7.8 billion as sales declined at three of its four business segments. Aerospace was the exception, with growth of 17%.
Analysts polled by Thomson Reuters recently expected per-share earnings of $1.68 and revenue of $7.75 billion.
Operating margin rose to 12.3% from 11.4%.
As of Sept. 30, the company's total backlog was $47.9 billion, compared with the $51.5 billion reported a year earlier and $49.4 billion as of the second quarter's end.
Shares closed Tuesday at $88.16 and were inactive in recent premarket trading. The stock is up 27% this year.
Write to Tess Stynes at email@example.com
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(END) Dow Jones Newswires
October 23, 2013 07:50 ET (11:50 GMT)Copyright (c) 2013 Dow Jones & Company, Inc.
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