- General Dynamics (GD +5.2%) marches to a new 52-week high after beating Q4 earnings expectations, helped by higher sales for its combat systems unit that overshadowed a a slight miss in overall revenue.
- CEO Phebe Novakovic said in today's earnings conference call that GD was not able to convert its backlog of orders into revenue quickly enough last year, blaming the new administration and the use by Congress of Continuing Resolutions in lieu of a federal budget but adding that the situation had changed late in 2017.
- GD said Q4 revenues in the unit that makes tanks climbed 7.6% to $5.95B, while sales in the aerospace division, its biggest, rose 4% to $8.13B as it delivered 30 Gulfstream aircraft in the quarter, up from 28 a year earlier.
- Vertical Research reiterates a Buy rating and $237 price target on shares while noting that defense company earnings likely will be muddied with one-time items related to tax changes; GD came in a bit light on an operating basis but was outweighed by solid cash flow and improved margins, the firm says.
- Now read: 10 Dividend Growth Stocks For January 2018
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