General Dynamics 3Q Profit Falls On Low Jet Demand

DONNA BORAK

WASHINGTON (AP) — General Dynamics Corp.'s third-quarter earnings suffered from a drop in demand for business jets, but higher sales of defense products led the military contractor to boost its profit outlook for the year and it now expects business with foreign governments to grow next year, and beyond.

The company has benefited recently from strong demand from the Pentagon for equipment like heavily armored vehicles that can protect troops against roadside bombs in Iraq and Afghanistan. Now, foreign governments are looking for similar protection for their military. Sales of armored vehicles and tanks to Saudi Arabia, Iraq and Canada are forecast to grow in 2010, and become even stronger in 2011, the company said Wednesday in a conference call with investors and analysts.

Even as the administration debates future U.S. strategy in Afghanistan, and Congress completes the fiscal 2010 defense spending bill, President and CEO Jay Johnson said he remains confident its current defense programs will be supported in the budget process.

"While we await outcomes of these reviews it is clear to me that the fundamental need to fully equip our forces has not changed. The world is an increasingly dangerous place and our armed forces must have modern and capable systems in sufficient quantity," said Johnson.