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General Dynamics recorded its first war-related order in Ukraine as a government contracted the US aerospace and defense group for munitions.
Chief Executive Phebe Novakovic confirmed the order during a third-quarter earnings call with analysts on Wednesday, but did not provide details. She said the company received ammunition and ordnance orders totaling $370 million during the quarter.
For Ukraine’s fight against invading Russian forces, GD expects US military “to tell us they want more ammunition and ammunition, so we are working with them to increase production” , Novakovic said.
There is growing interest in GD’s land-based weapons systems, including its Stryker, Abrams and MPF battle tanks, she continued. In August, Poland placed an Abrams order for $1.1 billion.
GD earned $3.26 a share on revenue of $10 billion in the quarter through September, compared with $3.07 on revenue of $9.6 billion a year earlier. Analysts had expected $3.15 a share on revenue of $9.9 billion.
Demand for private jets contributed to a 5% rise in GD’s quarterly profit to $902 million. Affluent individuals embarked on private flights at the height of the Covid-19 pandemic, and interest remains high.
Novakovic said aircraft maker Gulfstream entered the “hottest” demand market it had ever seen in February 2021, and while third-quarter demand “wasn’t as overheated” , there was strong demand from the United States, Fortune 500 companies, Middle East and Southeast Asia, including first-time buyers, despite a global economic slowdown.
However, the aerospace group’s defense activity has been hampered by the lack of contractors for its government clients.
Many customers of GD’s technology mission systems “have a severe shortage of contract agents which has hampered their” order tracking, Novakovic said.
“In addition, and quite understandably, customer orientation has been reoriented in some areas to meet Ukraine’s most pressing demands.”