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General Dynamics (GD) Q3 Earnings Top, Revenues Lag Estimates

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·3 min read
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General Dynamics Corporation GD reported third-quarter 2021 earnings from continuing operations of $3.07 per share, which beat the Zacks Consensus Estimate of $2.97 by 3.4%.

Quarterly earnings improved 5.9% from $2.90 per share in the year-ago quarter, primarily driven by operating margin expansion.

Total Revenues

General Dynamics’ third-quarter revenues of $9,568 million missed the Zacks Consensus Estimate of $9,825 million by 2.6%. Revenues, however, grew 1.5% from $9,431 million in the year-ago quarter.

General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation Price, Consensus and EPS Surprise
General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation price-consensus-eps-surprise-chart | General Dynamics Corporation Quote

Backlog

General Dynamics recorded a total backlog of $88.1 billion, up 8.1% year over year. The estimated potential contract value was $41.5 billion.

Segmental Performance

Aerospace: The segment reported revenues of $2,066 million, up 4.6% year over year. However, operating earnings of $262 million deteriorated 7.4% from the prior-year quarter’s $283 million.

Marine Systems: Segment revenues rose 9.6% from the prior-year quarter to $2,637 million. Also, operating earnings were up 2.7% from the year-ago quarter to $229 million.

Technologies: The segment reported revenues of $3,120 million, which decreased 4% year over year. Operating earnings of $327 million grew 4.1% from the prior-year quarter’s $314 million.

Combat Systems: The segment’s revenues of $1,745 million were down 3.1% from the year-ago quarter’s $1,801 million. Operating earnings, however, improved 2.2% year over year to $276 million.

Operational Highlights

Company-wide operating margin expanded 90 basis points (bps) to 11.3% from the year-ago quarter reported figure.

In the quarter under review, General Dynamics’ operating costs and expenses increased 1.5% from the year-ago period to $8,488 million.

Interest expenses in the reported quarter declined 16.1% year over year to $99 million.

Financial Condition

As of Oct 3, 2021, General Dynamics’ cash and cash equivalents were $3,139 million compared with $2,824 million as of Dec 31, 2020.

Long-term debt, as of Oct 3, 2021, was $11,485 million, which escalated from the 2020-end level of $9,995 million.

At the end of third-quarter 2021, the company generated cash from operating activities of $2,589 million compared with $1,296 million generated in the year-ago period.

Zacks Rank

General Dynamics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Hexcel Corporation HXL reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.

Raytheon Technologies Corporation’s RTX third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.

Lockheed Martin Corporation LMT reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96 by a whopping 239.8%.


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