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General Dynamics' (GD) Q3 Earnings Beat, Revenues Rise Y/Y

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General Dynamics Corporation (GD - Free Report) reported third-quarter 2019 earnings from continuing operations of $3.14 per share, which beat the Zacks Consensus Estimate of $3.06 by 2.6%. The bottom line also improved 10.2% from the prior-year quarter’s $2.85 per share.

The company reported GAAP earnings of $3.17 per share compared with the year-ago quarter’s $2.88.

Total Revenues

General Dynamics’ third-quarter revenues of $9,761 million surpassed the Zacks Consensus Estimate of $9,682 million by 0.82%. Further, revenues grew 7.3% from $9,094 million in the year-ago quarter. The year-over-year increase can be attributed to growth in Aerospace, Combat and Marine Systems segments.

Backlog

General Dynamics’ total backlog at the end of third-quarter 2019 was $67.4 billion. Estimated potential contract value, representing management’s estimate of value in contracts and unexercised options, was $35.6 billion. Total estimated contract value, the sum of all backlog components, was $103 billion.

Segmental Performance

Aerospace: The segment reported revenues of $2,495 million, up 22.8% year over year. Operating earnings of $393 million rose 4.5% from the prior-year quarter’s $376 million.

Combat Systems: Segment revenues rose 14.2% from the prior-year quarter to $1,740 million. Moreover, operating earnings were up 9.5% from the year-ago quarter to $264 million.

Information Systems and Technology: The segment reported revenues of $2,071 million, which declined 10.2% year over year. Operating earnings also dropped 7% from the prior-year period to $146 million.

Marine Systems: The segment’s revenues of $2,235 million were up 11.6% from the year-ago quarter’s $2,003 million. Operating earnings also improved 23.7% year over year to $209 million.

Mission Systems: The segment’s revenues of $1,220 million declined 0.8% from the year-ago quarter’s $1,230 million. Operating earnings of $185 million grew 3.4% from the year-ago quarter’s $179 million.

General Dynamics Corporation Price, Consensus and EPS Surprise

Operational Highlights

Company-wide operating margin was in line with the year-ago quarter’s operating margin of 12.5%.

In the quarter under review, General Dynamics’ operating costs and expenses rose 7.4% from the year-ago period to $8,545 million.

Interest expenses in the reported quarter amounted to $114 million, in line with the year-ago quarter’s number.

Financial Condition

As of Sep 29, 2019, General Dynamics’ cash and cash equivalents were $974 million compared with $963 million on Dec 31, 2018.

Long-term debt as of Sep 29, 2019, was $8,989 million, which massively declined from the 2018-end level of $11,444 million.

In the first nine months of 2019, the company’s cash provided by operating activities was $587 million compared with $1,081 million in the year-ago period.

Zacks Rank

General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin Corp. (LMT - Free Report) reported third-quarter 2019 earnings of $5.66 per share, which surpassed the Zacks Consensus Estimate of $5.03 by 12.5%. The bottom line also improved 10.1% from $5.14 registered in the year-ago quarter.

Textron Inc. (TXT - Free Report) reported third-quarter 2019 earnings from continuing operations of 95 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 11.8%. The bottom line increased 55.7% from the year-ago quarter.

Upcoming Defense Releases

Leidos Holdings Inc. (LDOS - Free Report) , a Zacks Rank #3 stock, is set to report third-quarter 2019 results on Oct 29.

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