General Dynamics Corporation (GD - Free Report) announced second-quarter 2016 earnings from continuing operations of $2.44 per share, beating the Zacks Consensus Estimate of $2.30 by 6.1%. Reported earnings were also up 7.5% from $2.27 recorded in the year-ago quarter.
Total Revenue
General Dynamics’ total revenue of $7,665 million missed the Zacks Consensus Estimate of $7,953 million by 3.6%. Reported revenues were also down 2.8% from $7,882 million in the year-ago quarter.
The decrease was due to lower contributions from the Aerospace, Combat Systems and Marine segments.
Backlog
The company recorded total backlog of $63.2 billion, down 9.7% year over year. Funded backlog at the quarter end was down 4.3% to $53.1 billion.
Segment Performance
Aerospace: The segment reported second-quarter 2016 revenues of $2,134 million, down 5.5% year over year. Operating earnings of $434 million decreased from $439 million in the year-ago quarter.
Combat Systems: Segment revenues dropped nearly 6.6% to $1,315 million. Operating earnings were down 3.1% to $219 million in the quarter.
Information Systems and Technology: The segment reported revenues of $2,229 million, up 0.6%. Operating income improved 3% to $244 million.
Marine Systems: The segment’s revenues of $1,987 million were down 0.7% from the year-ago figure of $2,001 million. Operating income also declined 3.2% to $181 million.
Operational Highlights
Company-wide operating margin expanded to 14% from the year-ago level of 13.7%.
In the quarter under review, General Dynamics’ operating costs and expenses declined nearly 3% to $6,595 million.
Financial Condition
As of Jun 30, 2016, General Dynamics’ cash and cash equivalents were $1,899 million, compared with $2,785 million as of Dec 31, 2015.
Long-term debt as of Jun 30, 2016 was $2,899 million, almost in line with the 2015-end level of $2,898 million.
In the first half of 2016, the company’s cash flow from operating activities was around $873 million, compared with $1,433 million in the year-ago period. Free cash flow from operations in the second quarter was $324 million, as against $538 million in the prior year.
Other Aerospace & Defense Releases
The Boeing Company (BA - Free Report) delivered second-quarter 2016 adjusted loss of 44 cents per share, narrower than the Zacks Consensus Estimate of loss of 88 cents. In the prior-year quarter, however, the company has reported earnings of $1.62.
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2016 adjusted earnings of $2.60 per share, beating the Zacks Consensus Estimate of $2.50 by 4%. Reported earnings were also up 5.3% from $2.47 recorded in the year-ago quarter.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2016 earnings of $3.32 per share, surpassing the Zacks Consensus Estimate of $2.92 by 13.7%. Earnings were also up 12.9% from the year-ago level.
Zacks Rank
General Dynamics currently has a Zacks Rank #2 (Buy).
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General Dynamics Corporation (GD - Free Report) announced second-quarter 2016 earnings from continuing operations of $2.44 per share, beating the Zacks Consensus Estimate of $2.30 by 6.1%. Reported earnings were also up 7.5% from $2.27 recorded in the year-ago quarter.
Total Revenue
General Dynamics’ total revenue of $7,665 million missed the Zacks Consensus Estimate of $7,953 million by 3.6%. Reported revenues were also down 2.8% from $7,882 million in the year-ago quarter.
The decrease was due to lower contributions from the Aerospace, Combat Systems and Marine segments.
Backlog
The company recorded total backlog of $63.2 billion, down 9.7% year over year. Funded backlog at the quarter end was down 4.3% to $53.1 billion.
Segment Performance
Aerospace: The segment reported second-quarter 2016 revenues of $2,134 million, down 5.5% year over year. Operating earnings of $434 million decreased from $439 million in the year-ago quarter.
Combat Systems: Segment revenues dropped nearly 6.6% to $1,315 million. Operating earnings were down 3.1% to $219 million in the quarter.
Information Systems and Technology: The segment reported revenues of $2,229 million, up 0.6%. Operating income improved 3% to $244 million.
Marine Systems: The segment’s revenues of $1,987 million were down 0.7% from the year-ago figure of $2,001 million. Operating income also declined 3.2% to $181 million.
Operational Highlights
Company-wide operating margin expanded to 14% from the year-ago level of 13.7%.
In the quarter under review, General Dynamics’ operating costs and expenses declined nearly 3% to $6,595 million.
Financial Condition
As of Jun 30, 2016, General Dynamics’ cash and cash equivalents were $1,899 million, compared with $2,785 million as of Dec 31, 2015.
Long-term debt as of Jun 30, 2016 was $2,899 million, almost in line with the 2015-end level of $2,898 million.
In the first half of 2016, the company’s cash flow from operating activities was around $873 million, compared with $1,433 million in the year-ago period. Free cash flow from operations in the second quarter was $324 million, as against $538 million in the prior year.
Other Aerospace & Defense Releases
The Boeing Company (BA - Free Report) delivered second-quarter 2016 adjusted loss of 44 cents per share, narrower than the Zacks Consensus Estimate of loss of 88 cents. In the prior-year quarter, however, the company has reported earnings of $1.62.
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2016 adjusted earnings of $2.60 per share, beating the Zacks Consensus Estimate of $2.50 by 4%. Reported earnings were also up 5.3% from $2.47 recorded in the year-ago quarter.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2016 earnings of $3.32 per share, surpassing the Zacks Consensus Estimate of $2.92 by 13.7%. Earnings were also up 12.9% from the year-ago level.
Zacks Rank
General Dynamics currently has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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