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Will Segmental Sales Drive General Dynamics' (GD) Q2 Earnings?
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General Dynamics Corporation (GD - Free Report) is set to release second-quarter 2024 results on Jul 24 before market open.
The company delivered an earnings surprise of 2.32% in the last four quarters, on average. The strong revenue performance across all of its business segments is likely to have added impetus to its overall second-quarter top line.
Aerospace to Post Solid Sales
Solid revenues earned from the deliveries of Gulfstream aircraft, particularly that of G650 ultra-large-cabin aircraft, must have bolstered the top line of the Aerospace business segment. Also, the solid deliveries of G700 jets, following the receipt of the Federal Aviation Administration’s certificate at the end of the first quarter and the European Union Aviation Safety Agency certification in the second quarter, are likely to have contributed favorably to the overall revenue performance of the Aerospace unit in the to-be-reported quarter.
Notable jet deliveries, along with solid aircraft services revenues backed by increased customer demand for aircraft maintenance, can be projected to have boosted the Aerospace unit’s top line.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the second quarter is pegged at $3004.3 million. This indicates a 53.8% increase from revenues reported in the year-ago quarter.
Marine Systems Holds Potential
The Marine Systems unit’s revenues in the to-be-reported quarter are likely to have benefited from the increased sales volume from shipbuilding for programs like the Columbia-class submarine.
The Zacks Consensus Estimate for the Marine segment’s revenues in the second quarter is pegged at $3,178.5 million. This calls for a 3.9% rise from the year-ago quarter’s reported figure.
Combat Systems’ Sales May Rise
Solid demand for GD’s wheeled and tracked combat vehicles, particularly the Abrams battle tank, both in Europe and the United States, is likely to have boosted the Combat Systems unit’s revenue performance in the second quarter. Increased weapons systems and munitions sales, backed by solid demand for artillery products, might also have contributed favorably to this segment’s top line.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the second quarter is pegged at $2,022.8 million. This indicates a 5.1% rise from the year-ago quarter’s reported figure.
Technologies Unit to Remain Steady
Strong demand for IT services boosting steady growth at GDIT, as well as the benefits of the transition from legacy programs to new programs in the mission systems business, is likely to have favored the Technologies unit’s revenues in the second quarter of 2024. However, unfavorable program timing and the ramp-down of legacy programs might have hurt the overall top-line performance of this segment.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the second quarter is pegged at $3,268.5 million. This suggests a jump of 1.6% from the year-ago quarter’s reported figure.
Backlog Shows Strength
A strong backlog indicates positive prospects for a company. In this context, our model suggests a year-over-year growth rate of 6.5% for GD’s backlog in the second quarter of 2024, indicating solid demand for General Dynamics’ products and services.
General Dynamics Corporation Price and EPS Surprise
With all of General Dynamics’ segments reflecting solid top-line growth projections, the overall revenue growth prospects of the company remain bright. The Zacks Consensus Estimate for GD’s second-quarter revenues is pegged at $11.48 billion, which suggests a 13.1% rise from the year-ago quarter.
Such a solid top-line performance projection is likely to have aided GD’s second-quarter bottom line. Also, lower interest expenses, backed by a lower debt balance and solid operating margins driven by improving supply chain challenges, might have a favorable impact on the company’s overall earnings performance.
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $3.31 per share, which indicates a rise of 22.6% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for General Dynamics this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
Earnings ESP: GD has an Earnings ESP of -0.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, General Dynamics carries a Zacks Rank #3.
Stocks to Consider
Below we have mentioned the following players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases.
The Zacks Consensus Estimate for LMT’s second-quarter earnings is pegged at $6.44 per share, while the same for sales is pegged at $17.06 billion. The company delivered a four-quarter average earnings surprise of 6.07%.
Northrop Grumman (NOC - Free Report) is slated to report its second-quarter 2024 results on Jul 25 before market open. It has an Earnings ESP of +1.56% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NOC’s second-quarter earnings stands at $5.97 per share, which suggests an 11.8% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $10.08 billion, which implies a 5.3% increase from that reported in the prior-year quarter.
Huntington Ingalls Industries (HII - Free Report) is expected to report its second-quarter 2024 results on Aug 1 before market open. It has an Earnings ESP of +0.39% and carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for HII’s second-quarter earnings stands at $3.59 per share, which suggests a 9.8% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $2.84 billion, which implies a 1.9% increase from that reported in the prior-year quarter.
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Will Segmental Sales Drive General Dynamics' (GD) Q2 Earnings?
General Dynamics Corporation (GD - Free Report) is set to release second-quarter 2024 results on Jul 24 before market open.
The company delivered an earnings surprise of 2.32% in the last four quarters, on average. The strong revenue performance across all of its business segments is likely to have added impetus to its overall second-quarter top line.
Aerospace to Post Solid Sales
Solid revenues earned from the deliveries of Gulfstream aircraft, particularly that of G650 ultra-large-cabin aircraft, must have bolstered the top line of the Aerospace business segment. Also, the solid deliveries of G700 jets, following the receipt of the Federal Aviation Administration’s certificate at the end of the first quarter and the European Union Aviation Safety Agency certification in the second quarter, are likely to have contributed favorably to the overall revenue performance of the Aerospace unit in the to-be-reported quarter.
Notable jet deliveries, along with solid aircraft services revenues backed by increased customer demand for aircraft maintenance, can be projected to have boosted the Aerospace unit’s top line.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the second quarter is pegged at $3004.3 million. This indicates a 53.8% increase from revenues reported in the year-ago quarter.
Marine Systems Holds Potential
The Marine Systems unit’s revenues in the to-be-reported quarter are likely to have benefited from the increased sales volume from shipbuilding for programs like the Columbia-class submarine.
The Zacks Consensus Estimate for the Marine segment’s revenues in the second quarter is pegged at $3,178.5 million. This calls for a 3.9% rise from the year-ago quarter’s reported figure.
Combat Systems’ Sales May Rise
Solid demand for GD’s wheeled and tracked combat vehicles, particularly the Abrams battle tank, both in Europe and the United States, is likely to have boosted the Combat Systems unit’s revenue performance in the second quarter. Increased weapons systems and munitions sales, backed by solid demand for artillery products, might also have contributed favorably to this segment’s top line.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the second quarter is pegged at $2,022.8 million. This indicates a 5.1% rise from the year-ago quarter’s reported figure.
Technologies Unit to Remain Steady
Strong demand for IT services boosting steady growth at GDIT, as well as the benefits of the transition from legacy programs to new programs in the mission systems business, is likely to have favored the Technologies unit’s revenues in the second quarter of 2024. However, unfavorable program timing and the ramp-down of legacy programs might have hurt the overall top-line performance of this segment.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the second quarter is pegged at $3,268.5 million. This suggests a jump of 1.6% from the year-ago quarter’s reported figure.
Backlog Shows Strength
A strong backlog indicates positive prospects for a company. In this context, our model suggests a year-over-year growth rate of 6.5% for GD’s backlog in the second quarter of 2024, indicating solid demand for General Dynamics’ products and services.
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation price-eps-surprise | General Dynamics Corporation Quote
Q2 Expectations
With all of General Dynamics’ segments reflecting solid top-line growth projections, the overall revenue growth prospects of the company remain bright. The Zacks Consensus Estimate for GD’s second-quarter revenues is pegged at $11.48 billion, which suggests a 13.1% rise from the year-ago quarter.
Such a solid top-line performance projection is likely to have aided GD’s second-quarter bottom line. Also, lower interest expenses, backed by a lower debt balance and solid operating margins driven by improving supply chain challenges, might have a favorable impact on the company’s overall earnings performance.
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $3.31 per share, which indicates a rise of 22.6% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for General Dynamics this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
Earnings ESP: GD has an Earnings ESP of -0.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings
ESP Filter.
Zacks Rank: Currently, General Dynamics carries a Zacks Rank #3.
Stocks to Consider
Below we have mentioned the following players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases.
Lockheed Martin (LMT - Free Report) is set to report second-quarter earnings on Jul 23 before market open. It has an Earnings ESP of +0.85% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LMT’s second-quarter earnings is pegged at $6.44 per share, while the same for sales is pegged at $17.06 billion. The company delivered a four-quarter average earnings surprise of 6.07%.
Northrop Grumman (NOC - Free Report) is slated to report its second-quarter 2024 results on Jul 25 before market open. It has an Earnings ESP of +1.56% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NOC’s second-quarter earnings stands at $5.97 per share, which suggests an 11.8% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $10.08 billion, which implies a 5.3% increase from that reported in the prior-year quarter.
Huntington Ingalls Industries (HII - Free Report) is expected to report its second-quarter 2024 results on Aug 1 before market open. It has an Earnings ESP of +0.39% and carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for HII’s second-quarter earnings stands at $3.59 per share, which suggests a 9.8% improvement from the second-quarter 2023 reported figure. The Zacks Consensus Estimate for second-quarter sales is pegged at $2.84 billion, which implies a 1.9% increase from that reported in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.