Adds share movement in paragraph 2, 2026 profit forecast in paragraph 3, comments from earnings call throughout
By Aatreyee Dasgupta and Mike Stone
Jan 28 (Reuters) - General Dynamics GD.N beat fourth-quarter profit and revenue estimates on Wednesday, driven by growth in combat and marine systems segments, but the defense and aerospace giant forecast its annual profit below analysts' expectations.
Shares of the company fell nearly 5% in morning trade.
Annual profit is expected to range between $16.10 and $16.20 per share, while analysts on average were estimating $17.29 per share, according to data compiled by LSEG.
On a post-earnings call, General Dynamics President Danny Deeb said the hit from U.S. tariffs in 2026 will be higher than the $41 million the company incurred in 2025 and has been "contemplated" in its annual margins.
The company's Marine Systems segment, which has been recovering from supply chain disruptions and labor shortages, saw increased productivity during the quarter.
"All the shipyards were up, but the submarine programs and electric boats were the real drivers of this growth," CEO Phebe Novakovic said.
The combat systems segment, which manufactures combat vehicles, weapons systems and munitions, benefited from growing international demand, especially in Europe, as geopolitical uncertainty and global conflicts continued to buoy sales.
Total bookings during the quarter were 1.6 times its billing, indicating General Dynamics' strength in the overall order book.
In the aerospace segment, annual Gulfstream business jet deliveries rose to 158 aircraft, up from last year's 136, as the segment continues to ramp up production and recover from supply chain issues.
Approximately 160 Gulfstream aircraft deliveries are expected in 2026.
For the quarter ended December 31, total quarterly revenue rose nearly 8% from a year ago to $14.38 billion. Analysts on average had expected fourth-quarter revenue of $13.81 billion.
The company's profit came in at $1.14 billion, compared with $1.15 billion a year ago. On an adjusted basis, earnings were $4.17 per share, above analysts' estimates of $4.09.
(Reporting by Aatreyee Dasgupta and Mike Stone; Editing by Maju Samuel)
((Aatreyee.Dasgupta@thomsonreuters.com;))