General Dynamics Corporation (NYSE:GD), an aerospace and defense company, is going to cut jobs at its subsidiary, General Dynamics Information Technology (GDIT), adding to the list of Virginia layoffs in 2018. According to the company’s WARN notice, the layoffs are effective April 24. These General Dynamics layoffs in April 2018 stand to impact 73 employees in Springfield, VA.
Moreover, General Dynamics’ IT division observed a decline in its revenue in 2017. It experienced a drop of 2.8% in its revenue over the year.
General Dynamics’ IT Division’s Revenue Declined by 2.8% Year-Over-Year
The company released its fourth quarter (Q4) results on January 24. The company’s earnings per share (EPS) for the fourth quarter was $2.50, which was a 32.3% rise from Q4 2016. General Dynamics’ revenue of $8.28 billion missed analyst estimates by $130.0 million; still, it was up 8.2% from the same quarter the year prior. For 2017, EPS grew 15.2% to $9.95 per share, while revenue was $31.0 billion, an increase of 1.3% compared to 2016.
On the other hand, General Dynamic’s IT division accounted for 29% of sales in 2017 and observed a 2.8% drop in its revenue over the year. Its operating earnings were 7.4%, while margins rose to 11.4%. The company’s service and products were in high demand during the quarter, with a book-to-bill ratio above 1:1. General Dynamic is currently set to design the U.S.’s Columbia-class nuclear submarines, which will help being in significant earnings in the coming years.
Besides IT, other divisions reported a rise in revenue for the complete year. Aerospace, which accounted for 26% of 2017’s sales, saw full-year revenue growth of four percent to $8.13 billion. Combat systems, which made up 19% of sales during 2017, had full-year revenue growth of 7.6% to $5.95 billion. Marine systems, accountable for 26% of 2017’s sales, saw revenue of $8.0 billion, same as it did for 2016.
GDIT’s Earlier Layoffs in Virginia
GDIT layoffs in 2017 affected 92 employees due to the closure of its office in Alexandria, Virginia. These GDIT job cuts in Virginia came amid a slide of 6.4% for the subsidiary in the first half of 2017. The contractor blamed the Trump administration for the inactive procurement activity which led the company to revise its IT division’s full-year sales guidance.
After the announcement of General Dynamic’s layoffs and performance, management has set some aggressive guidance for the company going forward. The company expects revenue in the range of $32.35 billion to $32.45 billion for 2018, which is a 4.4% to 4.8% rise over 2017. EPS is expected to be $10.90 to $11.00 per share.
“WARN notice,” Virginia Employment Commission, February 19, 2018.
“General Dynamics: This Aerospace And Defense Company Has A Long Runway For Growth,” Seeking Alpha, January 28, 2018.
“GDIT to close office, lay off dozens” Washington Technology, October 19, 2017.
“WARN Report,” Elevate, last accessed February 26, 2018.