Phebe Novakovic
Chairman, Chief Executive Officer at General Dynamics
Thank you, Nicole. Good morning, everyone, and thanks for being with us. Earlier this morning, we reported 4th-quarter earnings of $4.15 per diluted share on revenue of $13,338 million, operating earnings of $1,423 million and net earnings of $1,148 million. As you will see, this performance and the resultant performance for the year compare quite favorably to all relevant prior periods.
To briefly summarize, on a quarter-over-year ago quarter basis, revenue is up 14.3%, operating earnings are up 10.5%, net earnings are up 14.2% and earnings per diluted share are up 14%. It is fair to say that the quarter-over-quarter results are quite strong. Sequential results are similar. Here, we beat the prior quarter's revenue by 14.3%, operating earnings by 20.5%, net earnings by 23.9% and fully-diluted EPS by 23.4%.
The full-year is also up a common theme. Revenue is up 12.9%, operating earnings are up 13%, net earnings are up 14.1% and fully-diluted EPS is up 13.4%. Both revenue and operating earnings were up for each of the segments led by aerospace with revenue growth of 30.5% and with operating earnings growth of 23.9%. While we beat consensus for the year-by $0.05, we did not beat our own expectations and prior guidance for reasons largely beyond our control.
This leads me to a discussion of the segments. First, aerospace. The real story in aerospace is found in the continuing growth of both revenue and earnings, the continuing strong demand for Gulfstream aircraft, the overall strength of Gulfstream service business and the continuing growth and performance improvement at Jet Aviation. In the quarter, Aerospace had revenue of $3.7 billion and earnings of $585 million.
This represents a stunning 36.4% increase in revenue and a 30.3% increase in earnings on a quarter-over-quarter basis. The sequential numbers are even stronger with a 51% increase in revenue, coupled with a staggering 92% increase in operating earnings. The important point here is the dramatic increase in deliveries of in-service airplanes in the quarter, 47 versus 28 in the 3rd-quarter of 2024. For the year, aerospace revenue of $11.25 billion is up 30.5% greater than 2023.
Earnings of $1.5 billion are up 23.9% over '23. Revenue growth was driven by the delivery of 25 more aircraft than in '23. Earnings suffered a 70 basis-point margin compression from the prior year, largely driven by all the costs associated with getting the G700 certified in the early part of the year and the unexpected costs incurred getting this G700s out-the-door.
Nevertheless, aerospace revenue and earnings are less than we anticipated for both the quarter and the year because we did not deliver as many 700s as planned. We did, however, deliver 15 in the quarter and 30 for the year. You will recall that I told you that we expected to deliver 50 to 52 G700s this year and that the deliveries would be more or less evenly divided over the last 3/4 of the year. While we planned 15 for Q2 and delivered 11, we planned 15 to 16 for Q3 and delivered 4%. In the 4th-quarter, we believed that we could deliver 27 but delivered 15.
So what happened that caused us to fall short of plan? Let me identify the most important and impactful reasons and then talk about the implications of all of this for '25. First, aircraft engines arrived significantly late to schedule. We painted the aircraft before the engines arrived. This led to a significant amount of repaint that resulted in increased cost and time spent. But more importantly, we elected to induct these aircraft into our completion centers before installing engines. This represented a significant deviation from our process and proved to be detrimental to both cost and schedule.
Normally, before a green aircraft is inducted into a completion center, we run the engines and test all the plane systems under power, which typically leads to additional actions to correct any issues that might arise. Once the aircraft begins its completion phase, these tests and follow-on corrections are substantially more cumbersome. So it seemed like a rational decision at the time turned out to be quite troublesome. The good news is that most of the time-consuming aspects of this issue are behind us.
We are now largely receiving engines to schedule and quality escapes are more predictable and appropriate fixes well-known. Second, many of the aircraft planned for delivery in the quarter had highly customized interiors, first of type intricacies. These intricacies are considered to be major changes for regulatory purposes. This resulted in longer than anticipated efforts to finalize and achieve supplemental type certificates. This problem is largely behind us.
Third and maybe most important, late in the 3rd-quarter, a supplier quality escape on a specific component caused the replacement of several components on each planned aircraft delivery. The supplier was fully cooperative and is providing replacement components for all of our needs, but this rework has increased the number of test flights necessary to obtain the final certificate of airworthiness for each aircraft. So the removal and replacement of these components has impacted labor costs and schedule adversely.
While it had a significant impact in both the third and fourth quarters, we have largely worked our way through this problem with the cooperation of the vendor. Finally, many of the early deliveries were to buyers located in foreign countries where we were making first-time deliveries. While they recognized the FAA certification, they have a separate and sometimes extended inquiry before issuing registration. This is in many respects also behind us.
The supply-chain is now performing much better to schedule and even though we continue to be surprised by some quality escapes, the time it takes to identify and fix these faults has significantly improved. Turning to-market demand, we had a one-to-one book-to-bill in the quarter and for the year even as aircraft deliveries increased.
Orders were largely consistent with our internal plan. The delivery of the G700 and its performance in customer hands is driving increased demand for it, which we experienced in the quarter. After some slowing in the US during the second and third quarters, we continue to see improved interest across all models in both the US and Europe. Middle-East activity is quite strong and current activity in Southeast Asia and China has also improved.
Interestingly, the overall number of prospects in all areas continues to increase. So let's move on to the defense businesses. Combat Systems had revenue of $2.4 billion for the quarter, moderately more than a year-ago quarter. Earnings of $356 million are also up modestly on a 10 basis-point operating margin improvement.
Operating margin of 14.9% is quite wholesome. The sequential growth in revenue and earnings at 8.3% and 9.5%, respectively is stronger, particularly with strength at OTS. For the full-year, revenue of $9 billion is up 8.8% and earnings of $1.3 billion are up 11.2%, resulting in a 30 basis-point increase in operating margins as compared to a year-ago. All-in all, very nice growth profile. Combat saw robust order intake over the course of the year, resulting in a book-to-bill of 1.3 to one.
Orders came from across the portfolio with notable awards in munitions and international vehicle programs. New capacity to meet demand for artillery is coming online in our munitions business, which will drive additional munitions growth. Demand remains strong in the US and from our allies, particularly in the combat vehicle tract and wheeled business. This coupled with Combat's strong overall backlog of nearly $17 billion positions the Group well for continued strong performance. In short, this group had a very solid year with strong revenue growth, expanded margins, durable order activity and a strong order pipeline as we go-forward.
Turning to Marine Systems. Once again, our Shipbuilding Group had strong revenue growth. Marine revenue of $4 billion is up 16.2% against the year-ago quarter. Columbia class and Virginia-class construction and TAO volume drove the growth. DDG51 revenue also increased measurably, in short, impressive growth by any standard. Operating earnings of $200 million are down 7.8% in the quarter with a 130 basis-point decrease in operating margin.
Margins continue to be adversely impacted by additional delays in quality issues from the submarine supply-chain. Sequentially, revenue increased 10%, while earnings were down 22.5% for the reasons I just mentioned. For the full-year, marine revenue of $14.3 billion is up 15.1% and earnings of $935 million are up 7%, certainly a better result than the 4th-quarter taken alone.
The operating metrics tell us that we have in fact increased our productivity to somewhat offset increased costs, but not enough. So across the business, we have seen rapid growth of revenue and more modest growth in earnings. As I told you last quarter, although the submarine supply-chain is improving in places, places as of sequence work continues to increase our costs.
In addition, they have seen increased quality problems from the supply-chain that have further disrupted our build plan and driven increased cost for quality-control and inspection at EB. That said, we continue to drive productivity improvements and are redoubling our cost-cutting by reducing overhead and increasing our planning efficiency.
In addition, the Congress recently passed a continuing resolution that included nearly $9 billion for Colombia class construction and $5.7 billion for Virginia-class programs. While the Columbia portion of the CR is primarily to maintain the funding plan impacted by the delay in the 2025 budget. The Virginia-class funds provide the following. They allow the Navy to cover fact-of-life cost increases on the two FY '23 votes and one F-25 vote.
They also provide funds for additional workforce development and allow us to target funding at specific productivity areas that we are working out with our customer. We are working with our customer to get this under contract as soon as possible. In addition, the Navy is continuing to push funding into the industrial base to help improve their output timing and quality. This effort over-time will help. All of this tells us that we should see some improvement in the supply-chain slowly but surely.
Until then, we continue to control what we can control by increasing our own productivity and cutting costs. And lastly, technologies. It was another strong quarter with revenue of $3.24 billion, up 2.8% over the prior year. Operating earnings in the quarter are $319 million, up 4.6% on a margin of 9.8%, a 10 basis-point improvement over the 4th-quarter a year-ago.
The full-year comparisons are similar. Revenue at $13.1 billion is up 1.6%. Earnings of $1.26 billion are up 4.8% on a 30 basis-point improvement in operating margin. Both businesses finished a really good year with a strong 4th-quarter. In particular, GDIP delivered their fourth consecutive year of revenue and earnings growth, resulting in their highest-ever revenue and earnings and their strongest operating margin over this period.
Mission Systems had a good year as well. Their focus has been on margin expansion as they transition from sunsetting legacy programs to new program wins. So while their revenue was down about 2% year-over-year, earnings were up 5.5% on a 90 basis-point improvement in margin. We expect 2025 to be the final year of the program transition at Mission Systems with growth on both the top-line and bottom-line thereafter. Turning to orders, the Group had very nice order activity for the year. Total orders for the Group reached a record level of $14.7 billion, resulting in a book-to-bill of 1.1 for the year.
Similarly, the total awards, including options and IDIQ value were $21.8 billion. That led to an 18% increase in total potential contract value to $48.1 billion, which positions them nicely to continue on their growth trajectory. The Group's win rates remain very strong in the low 80% range for the year and their capture rate remains in the mid 60% range, both very strong for this industry. GDIT's digital accelerator investments are yielding very good results, driving almost $7.5 billion in award value in 2024 alone and a total of $10 billion in awards since they launched the program two years ago.
Likewise, Mission Systems secured a number of marquee wins last year as a result of their investments in innovative technology, including space ground systems, strategic recapitalization programs and Canadian land C4 ISR systems. All-in all, a strong year for the Technologies Group. This concludes my comments about the defense businesses. Let me ask him to provide detail on our cash performance for the quarter and the year, overall order activity and backlog, share repurchase activity and other items. I will then come back to discuss our thoughts on 2025.
