General Dynamics (GD) Q4 Earnings Top Estimates, Sales Up Y/Y

Zacks Equity Research Published on January 29, 2020

General Dynamics Corporation (GD - Free Report) reported fourth quarter and 2019 results. Fourth-quarter earnings from continuing operations of $3.51 per share beat the Zacks Consensus Estimate of $3.46 by 1.45%. Earnings were up 14.3% from $3.07 in the year-ago quarter.

For 2019, earnings were $11.98 per share, up 6.8% from $11.22 in the year-ago quarter. Moreover, full-year earnings exceeded the Zacks Consensus Estimate of $11.92 by 0.5%.

Total Revenues

General Dynamics’ fourth-quarter revenues of $10,773 million surpassed the Zacks Consensus Estimate of $10,602 million by 1.6%. Further, revenues increased 3.8% from $10,378 million in the year-ago quarter. Revenues grew year over year in four of the company’s five segments.

In 2019, total revenues increased 8.7% year over year to $39.35 billion. Full-year revenues surpassed the Zacks Consensus Estimate of $39.19 billion by 0.4%.

Backlog

The company recorded a total backlog of $86.95 billion, up 28.1% year over year. Funded backlog at the quarter-end was $57.53 billion.

Segment Performance

Aerospace: The segment reported revenues of $2,930 million, up 8.4% year over year. Operating earnings of $480 million increased 25.7% from the prior-year quarter’s $382 million.

Combat Systems: Segment revenues increased 13.1% to $1,972 million. Operating earnings were up 8.8% to $284 million in the quarter.

Information Systems and Technology: The segment reported revenues of $2,024 million, which fell 15% year over year. Operating income also declined 11.3% to $172 million.

Marine Systems: The segment’s revenues of $2,565 million were up 11.7% from the year-ago quarter’s $2,297 million. However, operating income declined 6.6% year over year to $199 million.

Mission Systems: The segment’s revenues of $1,282 million were up 2.5% from the year-ago quarter’s $1,251 million. Operating income grew 3.9% to $188 million from the year-ago quarter’s $181 million.

General Dynamics Corporation Price, Consensus and EPS Surprise

Operational Highlights

Company-wide operating margin expanded 50 basis points (bps) to 12.3% from the year-ago quarter’s 11.8%.

In the quarter under review, General Dynamics’ operating costs and expenses rose 3.2% to $9,445 million.

The company paid out $1,152 million in dividends in 2019 compared with $1,075 million in 2018.

Financial Condition

As of Dec 31, 2019, General Dynamics’ cash and cash equivalents were $902 million compared with $963 million as of Dec 31, 2018.

Long-term debt as of Dec 31 was $9,010 million compared with the 2018-end level of $11,444 million.

As of Dec 31, the company’s cash provided by operating activities was $2,981 million compared with $3,148 million in the year-ago period.

Free cash flow from operations at the end of the fourth quarter was $2,013 million compared with $1,824 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

Teledyne Technologies Inc. (TDY - Free Report) reported fourth-quarter 2019 adjusted earnings of $2.90 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 5.1%. The bottom-line figure came above the guided range of $2.71-$2.76.

Lockheed Martin Corp. (LMT - Free Report) reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 registered in the year-ago quarter.

An Upcoming Defense Release

Northrop Grumman Corp. (NOC - Free Report) is set to release fourth-quarter 2019 results on Jan 29.

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