FALLS CHURCH, Va. (AP) – Defense conglomerate General Dynamics Corp. reported a 21 percent increase in fourth quarter earnings Wednesday, thanks to revenue growth in all segments of its business.

The Falls Church-based contractor reported earnings of $406 million, or $2.00 per share, in the final three months of 2005, compared to $336 million, or $1.66 per share, in the year-ago quarter.

The earnings beat the consensus estimate of Wall Street analysts surveyed by Thomson First Call, who predicted earnings of $1.97 a share.

Quarterly sales increased 13 percent, from $5.17 billion a year ago to $5.83 billion.

“General Dynamics generated solid returns in the fourth quarter of 2005, capping another very strong year,” Chairman and Chief Executive Officer Nicholas Chabraja said in a statement.

The company increased sales and earnings in all four of its major business units – combat systems, information systems, aerospace and marine division, which includes Maine’s Bath Iron Works.

For the year, company earnings increased 19 percent, from $1.23 billion, or $6.09 per share, in 2004 to $1.46 billion, or $7.22 per share, in 2005.

Annual sales increased 11 percent, from $19.1 billion to $21.2 billion.

Chabraja said he expects per-share earnings growth to slow in 2006, predicting earnings of $7.80 to $7.85 a share. Analysts had been estimating 2006 earnings at $8.02 per share.

Chabraja acknowledged during the conference call, though, that he has historically been conservative in forecasting earnings.

Company executives “will try to beat the plan, and history tells me that most of the time they do,” Chabraja said.

Shares of General Dynamics fell $1.46, or 1.3 percent, to close at $114.34 on New York Stock Exchange.