General Dynamics (GD) Beats Q3 Earnings, Revenues Dip Y/Y

General Dynamics Corporation (NYSE:GD) reported third-quarter 2017 earnings from continuing operations of $2.52 per share, beating the Zacks Consensus Estimate of $2.43 by 3.7%. Reported earnings were up 6.8% from $2.36 recorded in the year-ago quarter.

Total Revenues

General Dynamics’ third-quarter total revenues of $7,580 million missed the Zacks Consensus Estimate of $7,892 million by 4%. Reported revenues also dipped 1% from $7,657 million in the year-ago quarter.

General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation Price, Consensus and EPS Surprise | General Dynamics Corporation Quote

Backlog

The company recorded a total backlog of $63.9 billion, down a mere 0.2% year over year. Funded backlog at the quarter end was down 1% to $52.7 billion.

Segment Performance

Aerospace: The segment reported revenues of $1,995 million, up 3.6% year over year. Operating earnings of $385 million increased 2.1% from the prior-year recorded figure of $377 million.

Combat Systems: Segment revenues rose 13% to $1,500 million. Operating earnings were up 18.2% to $247 million in the quarter.

Information Systems and Technology: The segment reported revenues of $2,154 million, down 7.6%. Operating income rose 5.9% to $253 million.

Marine Systems: The segment’s revenues of $1,931 million were down 6.9% from the year-ago figure of $2, 075 million. Operating income also dropped 9.1% to $179 million.

Operational Highlights

Company-wide operating margin expanded 60 basis points (bps) to 13.9% from the year-ago level of 13.3%.

In the quarter under review, General Dynamics’ operating costs and expenses declined 1.7% to $6,528 million.

Financial Condition

As of Oct 1, 2017, General Dynamics’ cash and cash equivalents were $2,722 million compared with $2,334 million as of Dec 31, 2016.

Long-term debt as of Oct 1, 2017 was $3,979 million, up from the 2016-end level of $2,988 million.

As of Oct 1, 2017, the company’s cash flow from operating activities was around $1,881 million compared with $1,372 million in the year-ago period.

Free cash flow from operations at the end of the third quarter was $751 million, compared with $389 million in the previous year.

Zacks Rank

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

Upcoming Peer Releases

Huntington Ingalls Industries, Inc. (NYSE:HII) is expected to report third-quarter 2017 results on Nov 8. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, with a positive average surprise of 8.56%. It has a solid long-term earnings growth rate of 15%.

Recent Peer Release

Lockheed Martin Corp. (NYSE:LMT) reported third-quarter 2017 earnings from continuing operations of $3.24 per share, which missed the Zacks Consensus Estimate of $3.25 by 0.3%. In the quarter, total revenues came in at $12.17 billion, which missed the Zacks Consensus Estimate of $12.83 billion by 5.1%.

Textron Inc. (NYSE:TXT) recently reported third-quarter 2017 adjusted earnings from continuing operations of 65 cents per share, beating the Zacks Consensus Estimate of 62 cents by 4.8%. Total revenues in the quarter were $3.48 billion, which missed the Zacks Consensus Estimate of $3.54 billion by 1.5%.

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