“The large capacity expansion that we’re putting in place today will further increase production.”

In context

“ion, up a stunning 24.4% over the year-ago quarter with growth at each of the business units, but particularly at OTS and European land systems. Earnings were $300 million, which was up 10.7%. Margins at 13.5% represent 170 basis point reduction versus the year-ago quarter, so once again we saw powerful revenue performance coupled with more modest operating margins in large part attributable to mix and new program starts. Some of our revenue increase is a result of facilities contracts to increase our artillery production capacity taken at lower margin. As you’d expect, these contracts will result in additional production at accretive margins over time. On the subject of munitions, we’re working very closely with our government customer and have accelerated production faster than planned. The large capacity expansion that we’re putting in place today will further increase production. We have a ways to go, but we’re making progress. The increase in combat revenue also came from new international vehicle programs, the ramp-up of the M10 Booker, higher artillery program volume, and higher volume on Piranha and Eagle vehicles in Europe. On a sequential basis, revenue was up $300 million or 15.6%, and earnings were up $49 million or 19.5% on a 50 basis point improvement in margin. Year-to-date, revenue was up $775 million or 15.1% and operating earnings were up $53 million or 7.1% over last year, so the numbers are quite impressive quarter-over-quarter, sequentially and year-to-date. Combat systems experienced very good order performance. Orders in the quarter resulted in a one-to-one book-to-bill, a very strong performance given the increased revenue and evidencing strong”