Major Contractors Report Little Damage from Sequestration
April 24, 2013
Defense contractors warned the automatic spending cuts known as sequestration would cause layoffs and facility closures, but nearly two months in, the biggest companies are reporting only a slight drop in sales.
Falls Church-based contracting giant General Dynamics saw its profit hit $571 million in the first quarter of the year, up 1.2 percent from the same period last year. Revenue dropped 2.3 percent to $7.4 billion.
Phebe N. Novakovic, the company’s chairman and chief executive, said the contractor is seeing a small effect in its combat systems business — which manufactures tanks and armor, among other items. But the company is mostly working on contracts based on previously placed orders.
The fiscal year 2013 “is looking solid,” she told analysts Wednesday. “I don’t see much of a risk to that at all.”