General Dynamics Corporation ( GD Quick Quote GD - Free Report) reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate of $2.85 by 1.8%. The bottom line, however, declined 7.6% from the prior-year quarter’s $3.14 per share.
The company reported GAAP earnings of $2.91 per share compared with the year-ago quarter’s $3.17.
General Dynamics’ third-quarter revenues of $9,431 million missed the Zacks Consensus Estimate of $9,596 million by 1.7%. Further, revenues declined 3.4% from $9,761 million in the year-ago quarter. The year-over-year decrease can be attributed to the decline in the Aerospace and the Information Technology segments.
General Dynamics’ total backlog at the end of third-quarter 2020 was $81.5 billion, up 21% from the year-ago quarter. Estimated potential contract value, representing management’s estimate of value in contracts and unexercised options, was $50.4 billion. Total estimated contract value, the sum of all backlog components, was $131.9 billion.
Segmental Performance Aerospace: The segment reported revenues of $1,975 million, down 20.8% year over year. Operating earnings of $283 million declined 28% from the prior-year quarter’s $393 million. Combat Systems: Segment revenues rose 3.5% from the prior-year quarter to $1,801 million. Moreover, operating earnings were up 2.3% from the year-ago quarter to $270 million. Information Systems and Technology: The segment reported revenues of $2,029 million, which declined 2% year over year. Operating earnings of $146 million in the quarter remained flat year over year. Mission Systems: The segment’s revenues of $1,221 million improved a mere 0.1% from the year-ago quarter’s $1,220 million. Operating earnings of $168 million fell 9.2% from the year-ago quarter’s $185 million. Marine Systems: The segment’s revenues of $2,405 million were up 7.6% from the year-ago quarter’s $2,235 million. Operating earnings also improved 6.7% year over year to $223 million. General Dynamics Corporation Price, Consensus and EPS Surprise Operational Highlights
Company-wide operating margin contracted 100 basis points (bps) to 11.5% from the year-ago quarter’s 12.5%.
In the quarter under review, General Dynamics’ operating costs and expenses declined 2.3% from the year-ago period to $8,347 million. Interest expenses in the reported quarter amounted to $118 million, up from $114 million registered in the year-ago quarter. Financial Condition
As of Sep 27, 2020, General Dynamics’ cash and cash equivalents were $1,469 million compared with $902 million on Dec 31, 2019.
Long-term debt as of Sep 27, 2020, was $9,978 million, which rose from the 2019-end level of $9,010 million. In the first nine months of 2020, the company’s cash provided by operating activities was $1,296 million compared with $587 million in the year-ago period. Zacks Rank
General Dynamics currently carries a Zacks Rank #4 (Sell).
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