General Dynamics Profit Edges Up; Shares Drop
General Dynamics shares are still up about 40% from a year ago, hitting an all-time high of $81.28 on Tuesday, as investors anticipate greater profits from building and repairing army vehicles being used in Iraq and Afghanistan.

The Falls Church, Va.-based company is also expected to benefit further from last year's purchase of Anteon International, which makes secure network systems for U.S. intelligence agencies, and the continuing boom in business jet sales lifting its Gulfstream unit.

General Dynamics' overall profit margin rose to 10.8% in the quarter from 10.6% in the 2005 fourth quarter. But margins declined slightly in its combat systems and marine systems units, which respectively include its armored vehicle and shipbuilding operations.

The company's Gulfstream unit delivered 30 jets in the quarter, compared with 24 a year ago. It took orders for 159 jets in 2006, up from 124 the year before.

The total year-end value of work on its books for which government funds have already been set aside -- known as funded backlog -- rose 14% to $32.7 billion from the end of 2005.