FALLS CHURCH, Va. (AP) – General Dynamics’ earnings increased 77 percent to $279 million in the final quarter of 2003, thanks to a 23 percent jump in revenue and a favorable comparison to results a year earlier that were depressed by a heavy one-time charge.

The defense conglomerate earned $279 million, or $1.40 a share, in the October-December period, compared to $157 million, or 78 cents a share, in the last three months of 2002. General Dynamics is the parent company of Maine shipbuilder Bath Iron Works.

A year ago, the company took a $112 million charge after discontinuing its business of laying undersea fiberoptic cable. But even excluding the one-time charge, this quarter’s earnings beat the year-ago quarter by $10 million.

The per-share earnings of $1.40 were slightly better than the $1.37 per share estimate of analysts surveyed by Thomson First Call.

Revenue for the quarter was $4.83 billion versus $3.94 billion a year earlier.

For the year, the company earned $1 billion, or $5.04 a share, on sales of $16.6 billion. In 2002, General Dynamics earned $917 million, or $4.52 a share, on sales of $13.8 billion.

Chief executive Nicholas Chabraja said the company “ended 2003 on an exceptional note.”

He credited several large contracts with the Army for its Future Combat Systems program – a major Pentagon technology initiative – with boosting revenue in the quarter, including a $2 billion contract to develop new manned ground vehicles for the Army.

The company also increased earnings significantly in its struggling aerospace group, which produces Gulfstream jets for corporate aviation and has seen sales drop because of the weak economy. The group earned $83 million in the quarter, compared to $53 million a year ago, despite a 9 percent decrease in sales.

“Gulfstream continued to manage its costs effectively, maintained high productivity and strengthened its core business,” Chabraja said.

For the coming year, Chabraja said he was cautiously optimistic about the Gulfstream unit, and expected strong performance throughout the company.

He predicted that sales would increase 14 percent in 2004, to more than $19 billion, and estimated earnings for the year at $5.40 to $5.50 a share.

General Dynamics shares were down $1.16, or 1.2 percent, at $92.67 in morning trading on the New York Stock Exchange.

AP-ES-01-21-04 1210EST