Orders for Gulfstream jets grew $1 billion in 2Q

Savannah-based Gulfstream Aerospace has posted its best second quarter for new aircraft sales since 2008, according to Phebe Novakovic, chairman and CEO of Gulfstream's parent company, General Dynamics (NYSE: GD).

The company's order book grew by nearly $1 billion in the quarter, to $14 billion, she said, adding that demand remains strong across Gulfstream's entire portfolio of business jets.

"Not surprisingly, North American sales dominated the order book in the quarter," Novakovic said. "We also saw the return of many Fortune 500 companies, which are now placing orders to replenish their fleets."

The majority of the backlog is in public and private companies and high-net-worth individuals, she said.

"We have very carefully controlled and monitored our exposure to the emerging markets because of their great volatility," she said. "We have some very good and reliable customers in each of those markets, but the real powerhouse here is North America.

Given the increased demand, especially for its higher-end models, Gulfstream is talking to suppliers to boost G650 production by "feathering in" an extra airplane here or there into the schedule.

Overall, Gulfstream delivered 41 completed jets in the quarter, three more than in the year-ago period.

Large-cabin jet shipments soared by seven units, to 33, while midsize jet deliveries fell by four aircraft, to eight.

Second-quarter revenues at General Dynamics' aerospace segment, which also includes Jet Aviation, climbed by $263 million, to $2.25 billion, while profits increased by $55 million, to $226 million. Looking at all four General Dynamics business segments, the company reported overall revenues of $7.9 billion for the second quarter 2015 over the same quarter in 2014.

Operating earnings were up nearly 14 percent to $1.1 billion, while earnings per fully diluted share were up more than 20 percent to $2.27.

BY THE NUMBERS: GENERAL DYNAMICS AEROSPACE

2Q 20152Q 2014Variance

Revenue$2.25 billion$1.99 billion13.2 percent

Operating earnings$439 million$384 million 14.3 percent

Operating margins19.4 percent19.2 percentN/A