Armored vehicles lift General Dynamics 2Q profit

General Dynamics' stock jumped nearly 7 percent, closing up $5.82 at $89.27 per share.

The Falls Church, Va.-based company earned $641 million, or $1.60 per share, in the latest quarter, compared with $513 million, or $1.26 per share, a year earlier. Excluding a 9-cent gain from a tax refund lawsuit settlement, earnings were $1.51 per share.

Analysts polled by Thomson Financial were expecting $1.44 cents per share in quarterly earnings from continuing operations on revenue of $7.23 billion.

Quarterly revenue rose nearly 11 percent to $7.30 billion.

Helped by expectations of a boom in sales for its corporate jets and continued business in heavily armored vehicles, General Dynamics significantly raised its 2008 earnings outlook. The company now expects a range of $6.00 to $6.05 per share. Previous company guidance was between $5.55 and $5.65 per share for 2008.

For the year, analysts expect General Dynamics to earn $5.91 per share on $29.65 billion in revenue.

"We have performed extremely well so far this year and built a backlog that positions us very well for the foreseeable future," CEO Nicholas Chabraja said Wednesday.

General Dynamics, which makes tanks, submarines, warships and Gulfstream private jets, has reaped big profits in recent quarters as the Pentagon scrambles to buy and replace equipment for wars in Iraq and Afghanistan.

The company is one of several contractors working on the mine resistant ambush protected vehicles, also known as MRAP, that are in high demand from military commanders to protect troops from roadside bombs. The Pentagon made the program its top weapons buying priority last year. The program is winding down, but last week the Marine Corps awarded General Dynamics a contract to built 773 MRAPs with a potential value of $552 million.