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General Dynamics (GD) Up 7% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for General Dynamics Corporation (GD - Free Report) . Shares have added nearly 7% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 Tops Q4 Earnings, Revenues up Y/Y
General Dynamics reported fourth-quarter 2016 earnings from continuing operations of $2.62 per share, beating the Zacks Consensus Estimate of $2.54 by 3.1%. Reported earnings were also up 9.2% from $2.40 recorded in the year-ago quarter.
Full-year earnings from continuing operations came in at $9.87 per share, surpassing the Zacks Consensus Estimate of $9.77 and improving 8.7% year over year.
Total Revenue
General Dynamics’ fourth-quarter total revenue of $8,233 million missed the Zacks Consensus Estimate of $8,258 million by 0.3%. Reported revenues, however, increased slightly from $8,229 million in the year-ago quarter.
Full-year revenues were also down a marginal 0.4% to $31,353 million. Moreover, the reported figure missed the Zacks Consensus Estimate of $31,370 million.
Backlog
The company recorded a total backlog of $59.8 billion, down 17.4% year over year. Funded backlog at the quarter end was down 4.7% to $49.4 billion.
Segment Performance
Aerospace: The segment reported fourth-quarter 2016 revenues of $2,224 million, up 3.8% year over year. Operating earnings of $436 million increased from $410 million.
Combat Systems: Segment revenues improved 10.5% to $1,684 million. Operating earnings were up 10.7% to $259 million in the quarter.
Information Systems and Technology: The segment reported revenues of $2,284 million, up 5.7%. Operating income improved 6.1% to $244 million.
Marine Systems: The segment’s revenues of $2,041 million were up 3% from the year-ago figure of $1,982 million. Operating income also increased 8.1% to $186 million.
Operational Highlights
Company-wide operating margin expanded 30 basis points to 13.6% from the year-ago level of 13.3%.
In the quarter under review, General Dynamics’ operating costs and expenses declined 5.1% to $7,116 million.
Financial Condition
As of Dec 31, 2016, General Dynamics’ cash and cash equivalents were $2,334 million, compared with $2,785 million as of Dec 31, 2015.
Long-term debt as of Dec 31, 2016 was $2,988 million, higher than the 2015-end level of $2,898 million.
As of Dec 31, 2016, the company’s cash flow from operating activities was around $2,198 million, compared with $2,607 million in the year-ago period. Free cash flow from operations in 2016 was $1,806 million compared with $2,038 million in the previous year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted 6.45% downward due to these changes.
At this time, General Dynamics' stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum 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 aggregte VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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General Dynamics (GD) Up 7% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for General Dynamics Corporation (GD - Free Report) . Shares have added nearly 7% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 Tops Q4 Earnings, Revenues up Y/Y
General Dynamics reported fourth-quarter 2016 earnings from continuing operations of $2.62 per share, beating the Zacks Consensus Estimate of $2.54 by 3.1%. Reported earnings were also up 9.2% from $2.40 recorded in the year-ago quarter.
Full-year earnings from continuing operations came in at $9.87 per share, surpassing the Zacks Consensus Estimate of $9.77 and improving 8.7% year over year.
Total Revenue
General Dynamics’ fourth-quarter total revenue of $8,233 million missed the Zacks Consensus Estimate of $8,258 million by 0.3%. Reported revenues, however, increased slightly from $8,229 million in the year-ago quarter.
Full-year revenues were also down a marginal 0.4% to $31,353 million. Moreover, the reported figure missed the Zacks Consensus Estimate of $31,370 million.
Backlog
The company recorded a total backlog of $59.8 billion, down 17.4% year over year. Funded backlog at the quarter end was down 4.7% to $49.4 billion.
Segment Performance
Aerospace: The segment reported fourth-quarter 2016 revenues of $2,224 million, up 3.8% year over year. Operating earnings of $436 million increased from $410 million.
Combat Systems: Segment revenues improved 10.5% to $1,684 million. Operating earnings were up 10.7% to $259 million in the quarter.
Information Systems and Technology: The segment reported revenues of $2,284 million, up 5.7%. Operating income improved 6.1% to $244 million.
Marine Systems: The segment’s revenues of $2,041 million were up 3% from the year-ago figure of $1,982 million. Operating income also increased 8.1% to $186 million.
Operational Highlights
Company-wide operating margin expanded 30 basis points to 13.6% from the year-ago level of 13.3%.
In the quarter under review, General Dynamics’ operating costs and expenses declined 5.1% to $7,116 million.
Financial Condition
As of Dec 31, 2016, General Dynamics’ cash and cash equivalents were $2,334 million, compared with $2,785 million as of Dec 31, 2015.
Long-term debt as of Dec 31, 2016 was $2,988 million, higher than the 2015-end level of $2,898 million.
As of Dec 31, 2016, the company’s cash flow from operating activities was around $2,198 million, compared with $2,607 million in the year-ago period. Free cash flow from operations in 2016 was $1,806 million compared with $2,038 million in the previous year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted 6.45% downward due to these changes.
General Dynamics Corporation Price and Consensus
General Dynamics Corporation Price and Consensus | General Dynamics Corporation Quote
VGM Scores
At this time, General Dynamics' stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum 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 aggregte VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.