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Why Is General Dynamics (GD) Up 1.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for General Dynamics (GD - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Dynamics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
General Dynamics Q2 Earnings Beat, Revenues Rise Y/Y
General Dynamics reported second-quarter 2023 earnings per share (EPS) of $2.70, which beat the Zacks Consensus Estimate of $2.59 by 4.2%. However, the figure decreased 1.8% from $2.75 per share recorded in the year-ago quarter.
Total Revenues
General Dynamics’ revenues of $10,152 million beat the Zacks Consensus Estimate of $9,413.3 million by 7.8%. The top line also improved 10.5% from that reported in the prior-year period.
Segmental Performance
Aerospace:The segment reported revenues of $1,953 million, up 4.6% year over year. Operating earnings of $236 million declined 0.8% from the prior-year quarter’s $238 million.
Marine Systems:This segment’s revenues rose 15.4% to $3,059 million from the year-ago quarter. Operating earnings of $235 million increased 11.4% from the year-ago quarter’s reported numbers.
Technologies:The segment’s revenues improved 7% year over year to $3,216 million. Operating earnings totaled $283 million, down 6.9% from the $304 million recorded in the prior-year quarter.
Combat Systems: The segment’s revenues of $1,924 million were up 15.5% from the year-ago quarter’s $1,666 million. Operating earnings also improved 2.4% year over year to $251 million.
Operational Highlights
GD’s operating earnings were $962 million, down 1.6% from the year-ago quarter’s reported figure of $978 million.
Operating costs and expenses increased 11.9% to $9.2 million from the year-ago period.
Interest expenses declined 6.3% year over year to $89 million.
Backlog
General Dynamics recorded a total backlog of $87.63 billion, down 2.4% from the fourth-quarter 2022’s backlog of $89.83 billion. The funded backlog at the second-quarter end was $67.89 billion.
Our model projected a backlog worth $91.22 billion in the second quarter of 2023.
Financial Condition
As of Jul 2, 2023, General Dynamics’ cash and cash equivalents were $1,154 million compared with $1,242 million as of Dec 31, 2022.
The long-term debt as of Jul 2, 2023 was $9,247 million, up from the 2022-end level of $9,243 million.
As of Jul 2, 2023, GD generated cash from operating activities of $2,193 million, down from the $2,627 million recorded in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -11.71% due to these changes.
VGM Scores
Currently, General Dynamics has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, General Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
General Dynamics is part of the Zacks Aerospace - Defense industry. Over the past month, Lockheed Martin (LMT - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended June 2023 more than a month ago.
Lockheed reported revenues of $16.69 billion in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $6.73 for the same period compares with $1.99 a year ago.
For the current quarter, Lockheed is expected to post earnings of $6.71 per share, indicating a change of -2.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Lockheed. Also, the stock has a VGM Score of C.
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Why Is General Dynamics (GD) Up 1.9% Since Last Earnings Report?
It has been about a month since the last earnings report for General Dynamics (GD - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Dynamics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
General Dynamics Q2 Earnings Beat, Revenues Rise Y/Y
General Dynamics reported second-quarter 2023 earnings per share (EPS) of $2.70, which beat the Zacks Consensus Estimate of $2.59 by 4.2%. However, the figure decreased 1.8% from $2.75 per share recorded in the year-ago quarter.
Total Revenues
General Dynamics’ revenues of $10,152 million beat the Zacks Consensus Estimate of $9,413.3 million by 7.8%. The top line also improved 10.5% from that reported in the prior-year period.
Segmental Performance
Aerospace:The segment reported revenues of $1,953 million, up 4.6% year over year. Operating earnings of $236 million declined 0.8% from the prior-year quarter’s $238 million.
Marine Systems:This segment’s revenues rose 15.4% to $3,059 million from the year-ago quarter. Operating earnings of $235 million increased 11.4% from the year-ago quarter’s reported numbers.
Technologies:The segment’s revenues improved 7% year over year to $3,216 million. Operating earnings totaled $283 million, down 6.9% from the $304 million recorded in the prior-year quarter.
Combat Systems: The segment’s revenues of $1,924 million were up 15.5% from the year-ago quarter’s $1,666 million. Operating earnings also improved 2.4% year over year to $251 million.
Operational Highlights
GD’s operating earnings were $962 million, down 1.6% from the year-ago quarter’s reported figure of $978 million.
Operating costs and expenses increased 11.9% to $9.2 million from the year-ago period.
Interest expenses declined 6.3% year over year to $89 million.
Backlog
General Dynamics recorded a total backlog of $87.63 billion, down 2.4% from the fourth-quarter 2022’s backlog of $89.83 billion. The funded backlog at the second-quarter end was $67.89 billion.
Our model projected a backlog worth $91.22 billion in the second quarter of 2023.
Financial Condition
As of Jul 2, 2023, General Dynamics’ cash and cash equivalents were $1,154 million compared with $1,242 million as of Dec 31, 2022.
The long-term debt as of Jul 2, 2023 was $9,247 million, up from the 2022-end level of $9,243 million.
As of Jul 2, 2023, GD generated cash from operating activities of $2,193 million, down from the $2,627 million recorded in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -11.71% due to these changes.
VGM Scores
Currently, General Dynamics has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, General Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
General Dynamics is part of the Zacks Aerospace - Defense industry. Over the past month, Lockheed Martin (LMT - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended June 2023 more than a month ago.
Lockheed reported revenues of $16.69 billion in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $6.73 for the same period compares with $1.99 a year ago.
For the current quarter, Lockheed is expected to post earnings of $6.71 per share, indicating a change of -2.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Lockheed. Also, the stock has a VGM Score of C.