How did the global economic downturn impact General Dynamics in 2009?

The global economic downturn significantly impacted General Dynamics' Aerospace segment, leading to reduced aircraft deliveries and services revenue. However, the company's defense segments, particularly Combat Systems and Marine Systems, experienced strong growth, largely offsetting the decline in Aerospace and resulting in overall revenue growth for the company.

What were the key drivers of revenue growth for General Dynamics in 2009?

The primary drivers of revenue growth were increased demand and production in the defense sector, including U.S. military vehicle programs (Stryker and Abrams), shipbuilding and repair services for the U.S. Navy, and robust performance in information systems and technology. Acquisitions made in late 2008 and 2009 also contributed to revenue growth in the Combat Systems and Information Systems and Technology segments.

How is General Dynamics managing its backlog and future business outlook?

General Dynamics maintained a significant backlog of $65.5 billion at the end of 2009, providing a strong foundation for future revenue. The company expects continued growth in its defense businesses, driven by ongoing U.S. defense spending and international opportunities. For the Aerospace segment, the company anticipates a modest improvement in 2010, with a focus on its large-cabin aircraft and services, while noting the continued challenges in the mid-size aircraft market.

What is the company's financial health and how is it deploying capital?

General Dynamics demonstrated strong financial health by generating $2.86 billion in net cash from operating activities in 2009. The company actively deployed this cash through strategic acquisitions, capital expenditures, dividend payments, and share repurchases, while also reducing its net debt. This financial discipline provides flexibility and supports shareholder returns.

GD 10-K FY2009 Annual Report — Revenue, Net Income, EPS

Summary

In 2009, General Dynamics (GD) demonstrated resilience by achieving revenue growth, primarily driven by its defense segments (Combat Systems, Marine Systems, and Information Systems and Technology). This growth was strong enough to offset a decline in the Aerospace segment, which was impacted by the downturn in the business-jet market. The company's defense business benefited from increased U.S. military spending and modernization efforts, as well as international demand for its products. Acquisitions in 2008 and 2009 bolstered the Information Systems and Technology and Combat Systems groups. Despite a challenging economic environment, GD maintained a solid cash flow, enabling continued investment in product development and strategic acquisitions, while also returning capital to shareholders through dividends and share repurchases.

Financial Highlights

55 data points

Beta

Revenue

$31.98B

0.2% Gross Margin

Net Income

$2.39B

0.1% Net Margin

EPS (Diluted)

$6.17

Total Assets

$31.08B

Cash & Equivalents

$2.26B

Free Cash Flow

$2.47B

Financial Statements

Beta

Revenue	$31.98B
Cost of Revenue	$26.35B
Gross Profit	$5.63B
R&D Expenses	$925.00M
Operating Expenses	$28.31B
Operating Income	$3.67B
Interest Expense	$171.00M
Net Income	$2.39B
EPS (Basic)	$6.21
EPS (Diluted)	$6.17
Shares Outstanding (Basic)	385.48M
Shares Outstanding (Diluted)	387.92M

Key Highlights

1General Dynamics reported a 9.2% increase in revenue for 2009, reaching $31.98 billion, primarily driven by strong performance in its defense segments.
2The Combat Systems segment saw significant revenue growth of 17.7%, boosted by U.S. military vehicle programs and international demand, along with the acquisition of AxleTech International.
3Marine Systems experienced an 14.5% revenue increase, attributed to higher activity on U.S. Navy shipbuilding and repair programs.
4Information Systems and Technology achieved record revenue levels in 2009, showing a 7.6% increase, driven by growth across all its market segments.
5The Aerospace segment's revenue declined by 6.2% due to reduced Gulfstream aircraft deliveries amid the business-jet market downturn, though this was partially offset by the acquisition of Jet Aviation.
6The company generated strong operating earnings of $3.68 billion, with operating margins at 11.5%.
7General Dynamics maintained a healthy cash flow, with net cash provided by operating activities at $2.86 billion, underscoring its financial stability.
8The company's backlog remained substantial at $65.5 billion at the end of 2009, providing visibility into future revenue streams.

GENERAL DYNAMICS CORP Annual Report, Year Ended Dec 31, 2009

Summary

Financial Highlights

Key Highlights

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