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Will Segmental Sales Hurt General Dynamics' (GD) Q3 Earnings?
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General Dynamics Corporation (GD - Free Report) is set to release third-quarter 2023 results on Oct 25 before market open.
General Dynamics delivered an earnings surprise of 2.99% in the last four quarters, on average. The weak revenue performance across two of its major business segments is likely to have dented its overall third-quarter top line. The bottom line is likely to have been impacted by supply-chain disruptions and labor issues.
Aerospace Unit to Impact Total Revenues
Supply-chain issues, along with fewer aircraft deliveries, may have dented the revenue performance of this segment in the third quarter. However, strong revenues from service activity are likely to have contributed to the overall revenue performance of this segment in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the third quarter is pegged at $2,234 million. This indicates a 4.8% decline from revenues reported in the year-ago quarter.
Marine Systems Holds Potential
The Marine Systems unit’s revenues are likely to have been favorably impacted by the increased volume of the Columbia-class submarine program in the soon-to-be-reported quarter. However, the supply-chain constraints of the Virginia-class program are likely to dent this segment’s third-quarter results.
The Zacks Consensus Estimate for the Marine segment’s revenues in the third quarter is pegged at $2,791 million. This suggests a 0.8% improvement from revenues reported in the year-ago quarter.
Combat Systems’ Sales May Rise
Higher volumes on several wheeled and tracked vehicle contracts and higher revenues from weapons systems and munitions are likely to have added impetus to Combat Systems’ third-quarter revenues.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the third quarter is pegged at $1,892 million. This indicates a 5.8% increase from revenues reported in the year-ago quarter.
Technologies Unit’s Revenues Likely to Improve
Increased demand across this segment’s businesses and the acquisition of a C5ISR solution business are likely to have favored the Technologies unit’s revenues in the third quarter of 2023. However, the negative impact of the program mix may have offset the positive momentum in its revenue performance in the third quarter.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the third quarter is pegged at $2,984 million. This calls for a 2.8% decline from revenues reported in the year-ago quarter.
Backlog Shows Strength
A strong backlog indicates positive prospects for a company. In this context, our model suggests a growth rate of 33.7% for GD’s backlog in the third quarter of 2023, indicating high demand for General Dynamics’ products and services.
Other Factors to Note
The weak sales performance of the company’s two major segments may have impacted the overall top line in the third quarter. Supply-chain disruptions and labor issues may have continued to impact the overall margins of the company, thus dampening the bottom line of General Dynamics in the soon-to-be-reported quarter.
General Dynamics Corporation Price and EPS Surprise
The Zacks Consensus Estimate for third-quarter revenues is pegged at $9.94 billion, suggesting a 0.4% decline from the year-ago quarter.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.87 per share, indicating a decline of 11.9% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for General Dynamics this time. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat, which is the case here, as given below.
General Dynamics has an Earnings ESP of +0.61% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other defense companies that you may want to consider as these also have the right combination of elements to post an earnings beat this season:
The Zacks Consensus Estimate for L3Harris’s third-quarter earnings, pegged at $3.07 per share, indicates a decline of 5.8% from the prior-year reported figure. The Zacks Consensus Estimate for LHX’s sales suggests a growth rate of 13.7% from the prior-year reported figure.
Northrop Grumman (NOC - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #2. NOC delivered a four-quarter average earnings surprise of 4.38%.
The Zacks Consensus Estimate for NOC’s third-quarter sales is pegged at $9.67 billion, suggesting a growth rate of 7.8% from the prior-year reported figure. The Zacks Consensus Estimate for its third-quarter earnings implies a decline of 2% from the prior-year reported figure.
RTX Corporation (RTX - Free Report) has an Earnings ESP of +1.65% and a Zacks Rank #3. RTX delivered a four-quarter average earnings surprise of 7.90%.
The Zacks Consensus Estimate for RTX’s third-quarter sales is pegged at $18.71 billion, suggesting a growth rate of 10.4% from the prior-year reported figure. The Zacks Consensus Estimate for its third-quarter earnings stands at $1.19 per share.
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Will Segmental Sales Hurt General Dynamics' (GD) Q3 Earnings?
General Dynamics Corporation (GD - Free Report) is set to release third-quarter 2023 results on Oct 25 before market open.
General Dynamics delivered an earnings surprise of 2.99% in the last four quarters, on average. The weak revenue performance across two of its major business segments is likely to have dented its overall third-quarter top line. The bottom line is likely to have been impacted by supply-chain disruptions and labor issues.
Aerospace Unit to Impact Total Revenues
Supply-chain issues, along with fewer aircraft deliveries, may have dented the revenue performance of this segment in the third quarter. However, strong revenues from service activity are likely to have contributed to the overall revenue performance of this segment in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the third quarter is pegged at $2,234 million. This indicates a 4.8% decline from revenues reported in the year-ago quarter.
Marine Systems Holds Potential
The Marine Systems unit’s revenues are likely to have been favorably impacted by the increased volume of the Columbia-class submarine program in the soon-to-be-reported quarter. However, the supply-chain constraints of the Virginia-class program are likely to dent this segment’s third-quarter results.
The Zacks Consensus Estimate for the Marine segment’s revenues in the third quarter is pegged at $2,791 million. This suggests a 0.8% improvement from revenues reported in the year-ago quarter.
Combat Systems’ Sales May Rise
Higher volumes on several wheeled and tracked vehicle contracts and higher revenues from weapons systems and munitions are likely to have added impetus to Combat Systems’ third-quarter revenues.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the third quarter is pegged at $1,892 million. This indicates a 5.8% increase from revenues reported in the year-ago quarter.
Technologies Unit’s Revenues Likely to Improve
Increased demand across this segment’s businesses and the acquisition of a C5ISR solution business are likely to have favored the Technologies unit’s revenues in the third quarter of 2023. However, the negative impact of the program mix may have offset the positive momentum in its revenue performance in the third quarter.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the third quarter is pegged at $2,984 million. This calls for a 2.8% decline from revenues reported in the year-ago quarter.
Backlog Shows Strength
A strong backlog indicates positive prospects for a company. In this context, our model suggests a growth rate of 33.7% for GD’s backlog in the third quarter of 2023, indicating high demand for General Dynamics’ products and services.
Other Factors to Note
The weak sales performance of the company’s two major segments may have impacted the overall top line in the third quarter. Supply-chain disruptions and labor issues may have continued to impact the overall margins of the company, thus dampening the bottom line of General Dynamics in the soon-to-be-reported quarter.
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation price-eps-surprise | General Dynamics Corporation Quote
Q3 Estimates
The Zacks Consensus Estimate for third-quarter revenues is pegged at $9.94 billion, suggesting a 0.4% decline from the year-ago quarter.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.87 per share, indicating a decline of 11.9% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for General Dynamics this time. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat, which is the case here, as given below.
General Dynamics has an Earnings ESP of +0.61% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other defense companies that you may want to consider as these also have the right combination of elements to post an earnings beat this season:
L3Harris Technologies, Inc. (LHX - Free Report) has an Earnings ESP of +0.86% and a Zacks Rank #3. The long-term earnings growth rate of LHX is 2.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for L3Harris’s third-quarter earnings, pegged at $3.07 per share, indicates a decline of 5.8% from the prior-year reported figure. The Zacks Consensus Estimate for LHX’s sales suggests a growth rate of 13.7% from the prior-year reported figure.
Northrop Grumman (NOC - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #2. NOC delivered a four-quarter average earnings surprise of 4.38%.
The Zacks Consensus Estimate for NOC’s third-quarter sales is pegged at $9.67 billion, suggesting a growth rate of 7.8% from the prior-year reported figure. The Zacks Consensus Estimate for its third-quarter earnings implies a decline of 2% from the prior-year reported figure.
RTX Corporation (RTX - Free Report) has an Earnings ESP of +1.65% and a Zacks Rank #3. RTX delivered a four-quarter average earnings surprise of 7.90%.
The Zacks Consensus Estimate for RTX’s third-quarter sales is pegged at $18.71 billion, suggesting a growth rate of 10.4% from the prior-year reported figure. The Zacks Consensus Estimate for its third-quarter earnings stands at $1.19 per share.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.