UPDATE: General Dynamics Posts Upbeat Q3 Results, Lifts Forecast

General Dynamics (NYSE: GD) reported better-than-expected third-quarter results and raised its earnings forecast for the full year.The Falls Church, Virginia-based company posted quarterly net earnings continuing operations of $694 million, or $2.05 per share, compared to $652 million, or $1.84 per share, in the year-ago period. Its revenue rose 0.2% to $7.75 billion. However, analysts were expecting earnings of $1.91 per share on revenue of $7.58 billion.Revenue in information-technology business dropped 12.9% to $2.25 billion, while aerospace revenue rose 6.4% to $2.29 billion. Combat systems revenue surged 6.8% to $1.4 billion, while marine systems revenue gained 7.2% to $1.82 billion in the quarter.At the end of the quarter, the total backlog was $74.4 billion. Net cash provided by operating activities in the quarter was $2.5 billion.Its operating margins increased 50 basis points to 12.9%."General Dynamics had a very strong quarter, evident in our operating earnings, operating margins at 12.9 percent and solid cash performance," said Phebe N. Novakovic, chairman and chief executive officer. "With a continued focus on operating performance and the company's significant increase in backlog throughout 2014, we are well-positioned for the opportunities ahead."General Dynamics now expects FY14 earnings of $7.60 to $7.70 per share, versus its earlier forecast of $7.40 to $7.45 per share.General Dynamics shares gained 2.95% to $127.55 at 11:00 a.m. ET.