On Tuesday, defense contracting giant General Dynamics (NYSE:GD) announced that the executive vice president for the Information Systems and Technology division, Gerard J. DeMuro, a 14-year veteran of the company, has decided to leave at the end of this month "to pursue new professional opportunities." Until a successor is named, General Dynamics Chairman and Chief Executive Officer Phebe N. Novakovic will run the division directly.
Responding to DeMuro's decision, Novakovic stated, "Jerry DeMuro has made significant contributions to General Dynamics over the past 14 years that have enhanced shareholder value and deserve our recognition."
However, in the most recent quarter, DeMuro's IST division turned in arguably the weakest performance of any of General Dynamics' four main divisions. Q4 revenues at IST were down 11.8%, the second worst performance at the company. From a profits perspective, a massive $2 billion writedown of goodwill on companies purchased for the IST division over the past several years -- when DeMuro ran the shop -- swung IST from a $315 million operating profit in Q4 2011 to a $2 billion operating loss in Q4 2012.
For further perspective: But for the loss at IST, General Dynamics would have been profitable last quarter. Thanks to IST and its writedowns, the company incurred a $1.9 billion operating loss.