A month has gone by since the last earnings report for General Dynamics (GD Quick QuoteGD - Free Report) . Shares have added about 2.4% 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 catalysts.

General Dynamics' Q4 Earnings Miss, Revenues Up Y/Y

General Dynamics reported fourth-quarter 2023 earnings per share (EPS) of $3.64, which missed the Zacks Consensus Estimate of $3.66 by 0.6%. However, the figure increased 1.7% from $3.58 per share recorded in the year-ago quarter.

General Dynamics reported EPS of $12.02 per share for 2023, which missed the Zacks Consensus Estimate of $12.12 by 0.8%. The bottom line also decreased 1.4% from $12.19 per share recorded in the year-ago quarter.

Total Revenues

General Dynamics’ revenues of $11,668 million in the reported quarter beat the Zacks Consensus Estimate of $11,543 million by 1.1%. The top line also improved 7.5% from the prior-year reported figure.

Revenues were $42.27 billion for 2023, which beat the Zacks Consensus Estimate of $42.14 billion by 0.3%. The top line also rose 7.8% from $39.41 billion reported in the year-ago quarter.

Segmental Performance

Aerospace: The segment reported revenues of $2,744 million, up 12% year over year. Operating earnings of $449 million improved 33.2%.

Marine Systems: This segment’s revenues rose 14.8% to $3,408 million from the year-ago quarter. Operating earnings of $217 million decreased 8.4%.

Technologies: The segment’s revenues decreased 3.1% year over year to $3,152 million. Operating earnings totaled $305 million, down 10.3%.

Combat Systems: The segment’s revenues of $2,364 million were up 8.5% from the year-ago quarter. Operating earnings also improved 5.7% year over year to $351 million.

Operational Highlights

GD’s operating earnings were $1,288 million, up 5% from the year-ago quarter’s $1,227 million.

Operating costs and expenses increased 7.9% to $10.38 billion.

Interest expenses declined 8.2% year over year to $78 million.

Backlog

General Dynamics recorded a total backlog of $93.6 billion, down 2.1% from the third-quarter 2023’s backlog of $95.6 billion. The funded backlog at the fourth-quarter end was $72.48 billion.

Our model projected a backlog worth $95.36 billion for the fourth quarter of 2023.

Financial Condition

As of Dec 31, 2023, General Dynamics’ cash and cash equivalents were $1,913 million compared with $1,242 million as of Dec 31, 2022.

The long-term debt as of Dec 31, 2023, was $8,754 million, down from the 2022-end level of $9,243 million.

For the full year ended Dec 31, 2023, GD generated cash from operating activities of $4,710 million, up from $4,579 million recorded a year ago.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, General Dynamics has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.