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General Dynamics (GD) Up 1.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for General Dynamics (GD - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Dynamics 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' Q4 Earnings Top, Revenues Rise Y/Y
General Dynamics reported its fourth-quarter 2022 earnings per share (EPS) of $3.58, which beat the Zacks Consensus Estimate of $3.53 by 1.4%. Quarterly earnings increased 5.6% from $3.39 per share in the year-ago quarter.
For full-year 2022, the company reported earnings of $12.19 per share, which came in 5.5% higher than the year-ago figure of $11.55. The full-year bottom line also surpassed the Zacks Consensus Estimate for earnings of $12.14 per share by 0.4%.
Our model projected adjusted earnings of $3.44 per share for the fourth quarter and $12.06 per share for full-year 2022.
Total Revenues
General Dynamics’ fourth-quarter revenues of $10,851 million beat the Zacks Consensus Estimate of $10,674 million by 1.7%. Revenues also improved 5.4% from the year-ago quarter.
For full-year 2022, the company recorded revenues worth $39.41 billion, up 2.4% from 2021’s reported figure. The full-year revenues also beat the Zacks Consensus Estimate of $39.22 billion.
Our model projected net sales of $10.60 billion for the fourth quarter and $39.16 billion for 2022.
Segmental Performance
Aerospace: The segment reported revenues of $2,450 million, down 4.3% year over year. Operating earnings of $337 million declined 4.8% from the prior-year quarter’s $354 million.
Marine Systems: This segment’s revenues rose 3.4% from the prior-year quarter to $2,969 million. Operating earnings were up 0.9% from the year-ago quarter to $237 million.
Technologies: The segment’s reported revenues of $3,253 million improved 9.3% year over year. Operating earnings of $340 million increased 1.8% from the prior-year quarter’s $334 million.
Combat Systems: The segment’s revenues of $2,179 million were up 15.5% from the year-ago quarter’s $1,887 million. Operating earnings also improved 18.1% year over year to $332 million.
Operational Highlights
For the reported quarter, GD’s operating margin contracted 20 basis points from the year-ago quarter’s reported figure to 11.3%.
For the quarter under review, General Dynamics’ operating costs and expenses went up 5.7% from the year-ago period to $9.6 million.
Interest expenses for the reported quarter declined 8.6% year over year to $85 million.
Backlog
General Dynamics recorded a total backlog of $91.10 billion, up 2.6% from third-quarter 2022’s backlog of $88.80 billion. The funded backlog at fourth-quarter end was $67.15 billion.
Financial Condition
As of Dec 31, 2022, General Dynamics’ cash and cash equivalents were $1,242 million compared with $1,603 million as of Dec 31, 2021.
Long-term debt as of Dec 31, 2022 was $9,243 million, down from the 2021-end level of $10,490 million.
As of Dec 31, 2022, GD generated cash from operating activities of $4,579 million, up from $4,271 million generated in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -12.06% due to these changes.
VGM Scores
Currently, General Dynamics has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise General Dynamics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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General Dynamics (GD) Up 1.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for General Dynamics (GD - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Dynamics 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' Q4 Earnings Top, Revenues Rise Y/Y
General Dynamics reported its fourth-quarter 2022 earnings per share (EPS) of $3.58, which beat the Zacks Consensus Estimate of $3.53 by 1.4%. Quarterly earnings increased 5.6% from $3.39 per share in the year-ago quarter.
For full-year 2022, the company reported earnings of $12.19 per share, which came in 5.5% higher than the year-ago figure of $11.55. The full-year bottom line also surpassed the Zacks Consensus Estimate for earnings of $12.14 per share by 0.4%.
Our model projected adjusted earnings of $3.44 per share for the fourth quarter and $12.06 per share for full-year 2022.
Total Revenues
General Dynamics’ fourth-quarter revenues of $10,851 million beat the Zacks Consensus Estimate of $10,674 million by 1.7%. Revenues also improved 5.4% from the year-ago quarter.
For full-year 2022, the company recorded revenues worth $39.41 billion, up 2.4% from 2021’s reported figure. The full-year revenues also beat the Zacks Consensus Estimate of $39.22 billion.
Our model projected net sales of $10.60 billion for the fourth quarter and $39.16 billion for 2022.
Segmental Performance
Aerospace: The segment reported revenues of $2,450 million, down 4.3% year over year. Operating earnings of $337 million declined 4.8% from the prior-year quarter’s $354 million.
Marine Systems: This segment’s revenues rose 3.4% from the prior-year quarter to $2,969 million. Operating earnings were up 0.9% from the year-ago quarter to $237 million.
Technologies: The segment’s reported revenues of $3,253 million improved 9.3% year over year. Operating earnings of $340 million increased 1.8% from the prior-year quarter’s $334 million.
Combat Systems: The segment’s revenues of $2,179 million were up 15.5% from the year-ago quarter’s $1,887 million. Operating earnings also improved 18.1% year over year to $332 million.
Operational Highlights
For the reported quarter, GD’s operating margin contracted 20 basis points from the year-ago quarter’s reported figure to 11.3%.
For the quarter under review, General Dynamics’ operating costs and expenses went up 5.7% from the year-ago period to $9.6 million.
Interest expenses for the reported quarter declined 8.6% year over year to $85 million.
Backlog
General Dynamics recorded a total backlog of $91.10 billion, up 2.6% from third-quarter 2022’s backlog of $88.80 billion. The funded backlog at fourth-quarter end was $67.15 billion.
Financial Condition
As of Dec 31, 2022, General Dynamics’ cash and cash equivalents were $1,242 million compared with $1,603 million as of Dec 31, 2021.
Long-term debt as of Dec 31, 2022 was $9,243 million, down from the 2021-end level of $10,490 million.
As of Dec 31, 2022, GD generated cash from operating activities of $4,579 million, up from $4,271 million generated in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -12.06% due to these changes.
VGM Scores
Currently, General Dynamics has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise General Dynamics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.