General Dynamics ( GD) posted a 16% rise in fourth-quarter earnings from continuing operations, but the results were slightly shy of analysts' estimates.

The Falls Church, Va., defense contractor posted net income of $408 million, or $1.01 a share, up slightly from $406 million, or $1.01 a share, a year earlier.

Earnings from continuing operations, which exclude the sale of the company's coal operations, climbed to $463 million, or $1.13 a share, from the year-earlier $398 million, or 98 cents a share. On this basis, analysts polled by Thomson Financial were expecting earnings of $1.14 a share.

Revenue rose to $6.51 billion from $5.76 billion but missed Wall Street's expectation of $6.63 billion.

The company's funded backlog at year end totaled $32.7 billion, up $1 billion from the end of the third and up $4.5 billion from the end of 2005. Total backlog at year-end 2006 was $43.7 billion.

Shares fell $1.89, or 2.3%, to $79 in premarket trading.

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