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Why Is General Dynamics (GD) Up 2.8% 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 2.8% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
General Dynamics Q3 Earnings Beat, Revenues Rise Y/Y
General Dynamics reported third-quarter 2023 earnings per share (EPS) of $3.04, which beat the Zacks Consensus Estimate of $2.87 by 5.9%. However, the figure decreased 6.7% from $3.26 per share recorded in the year-ago quarter.
Total Revenues
General Dynamics’ revenues of $10,571 million beat the Zacks Consensus Estimate of $9,936.5 million by 6.4%. The top line also improved 6% from the prior-year reported figure.
Segmental Performance
Aerospace:The segment reported revenues of $2,032 million, down 13.4% year over year. Operating earnings of $268 million declined 14.1% from the prior-year quarter’s $312 million.
Marine Systems:This segment’s revenues rose 8.4% to $3,002 million from the year-ago quarter. Operating earnings of $211 million decreased 11.3% from the year-ago quarter’s reported numbers.
Technologies:The segment’s revenues improved 7.9% year over year to $3,313 million. Operating earnings totaled $315 million, up 10.5% from the $285 million recorded in the prior-year quarter.
Combat Systems: The segment’s revenues of $2,224 million were up 24.4% from the year-ago quarter’s $1,788 million. Operating earnings also improved 10.7% year over year to $300 million.
Operational Highlights
GD’s operating earnings were $1,057 million, down 3.7% from the year-ago quarter’s reported figure of $1,098 million.
Operating costs and expenses increased 7.2% to $9.5 million from the year-ago period.
Interest expenses declined 1.2% year over year to $85 million.
Backlog
General Dynamics recorded a total backlog of $95.56 billion, up 9.1% from the second-quarter 2023’s backlog of $87.63 billion. The funded backlog at the third-quarter end was $74.31 billion.
Our model projected a backlog worth $93.08 billion in the third quarter of 2023.
Financial Condition
As of Oct 1, 2023, General Dynamics’ cash and cash equivalents were $1,352 million compared with $1,242 million as of Dec 31, 2022.
The long-term debt as of Oct 1, 2023 was $9,248 million, up from the 2022-end level of $9,243 million.
As of Oct 1, 2023, GD generated cash from operating activities of $3,514 million, down from the $3,910 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.
VGM Scores
At this time, General Dynamics has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, Lockheed Martin (LMT - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Lockheed reported revenues of $16.88 billion in the last reported quarter, representing a year-over-year change of +1.8%. EPS of $6.77 for the same period compares with $6.87 a year ago.
For the current quarter, Lockheed is expected to post earnings of $7.26 per share, indicating a change of -6.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% 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 B.
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Why Is General Dynamics (GD) Up 2.8% 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 2.8% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
General Dynamics Q3 Earnings Beat, Revenues Rise Y/Y
General Dynamics reported third-quarter 2023 earnings per share (EPS) of $3.04, which beat the Zacks Consensus Estimate of $2.87 by 5.9%. However, the figure decreased 6.7% from $3.26 per share recorded in the year-ago quarter.
Total Revenues
General Dynamics’ revenues of $10,571 million beat the Zacks Consensus Estimate of $9,936.5 million by 6.4%. The top line also improved 6% from the prior-year reported figure.
Segmental Performance
Aerospace:The segment reported revenues of $2,032 million, down 13.4% year over year. Operating earnings of $268 million declined 14.1% from the prior-year quarter’s $312 million.
Marine Systems:This segment’s revenues rose 8.4% to $3,002 million from the year-ago quarter. Operating earnings of $211 million decreased 11.3% from the year-ago quarter’s reported numbers.
Technologies:The segment’s revenues improved 7.9% year over year to $3,313 million. Operating earnings totaled $315 million, up 10.5% from the $285 million recorded in the prior-year quarter.
Combat Systems: The segment’s revenues of $2,224 million were up 24.4% from the year-ago quarter’s $1,788 million. Operating earnings also improved 10.7% year over year to $300 million.
Operational Highlights
GD’s operating earnings were $1,057 million, down 3.7% from the year-ago quarter’s reported figure of $1,098 million.
Operating costs and expenses increased 7.2% to $9.5 million from the year-ago period.
Interest expenses declined 1.2% year over year to $85 million.
Backlog
General Dynamics recorded a total backlog of $95.56 billion, up 9.1% from the second-quarter 2023’s backlog of $87.63 billion. The funded backlog at the third-quarter end was $74.31 billion.
Our model projected a backlog worth $93.08 billion in the third quarter of 2023.
Financial Condition
As of Oct 1, 2023, General Dynamics’ cash and cash equivalents were $1,352 million compared with $1,242 million as of Dec 31, 2022.
The long-term debt as of Oct 1, 2023 was $9,248 million, up from the 2022-end level of $9,243 million.
As of Oct 1, 2023, GD generated cash from operating activities of $3,514 million, down from the $3,910 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.
VGM Scores
At this time, General Dynamics has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, Lockheed Martin (LMT - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Lockheed reported revenues of $16.88 billion in the last reported quarter, representing a year-over-year change of +1.8%. EPS of $6.77 for the same period compares with $6.87 a year ago.
For the current quarter, Lockheed is expected to post earnings of $7.26 per share, indicating a change of -6.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% 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 B.