General Dynamics reported increased earnings in the fourth quarter. They saw growth across its businesses. The company even noted its backlog is at record levels. But the G700 program saw a delay in achieving FAA certification This hurt the quarterly results and cost General Dynamics $1Bn in revenues.
“We had a solid fourth quarter, capping off a year that saw growth in all four segments and continued strong cash flow,” said Phebe Novakovic, chairman and CEO of General Dynamics.
The FAA certification delay means 15 deliveries that were planned for did not occur. Is this trickle down from the MAX? It appears so. The Rolls-Royce Pearl engines received FAA certification in September. Gulfstream also announced that it raised the G700’s maximum range to 7,750NM at Mach 0.85. Maximum speed was raised to 0.935M from 0.925M. The G700 undertook a world tour late last year.
For the year Gulfstream delivered 111 aircraft: 89 large-cabin and 22 super-midsize. This is down 7.5% from 120 (96 plus 24) from last year. Had the G700 certification been approved, deliveries would have been +5%.
Novakovic said: “We have 15 airplanes ready to go, and the hope is that we deliver them this quarter,” and noted that the book-to-bill ratio was 1.2:1 last year.
