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Will Aerospace Unit Drive General Dynamics' (GD) Q4 Earnings?
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General Dynamics Corporation (GD - Free Report) is set to release fourth-quarter and full-year 2023 results on Jan 24 before market open.
General Dynamics delivered an earnings surprise of 3.68% in the last four quarters, on average. The strong performance from its Aerospace unit is likely to have boosted its overall fourth-quarter results amid supply chain woes.
Aerospace Unit to Witness Strong Growth
Strong revenues from service activity, backed by solid commercial air traffic, are likely to have contributed to the overall revenue performance of this segment in the soon-to-be-reported quarter.
Within this segment, the Gulfstream unit expects 40-45 aircraft deliveries during the quarter, which implies improvement from fourth-quarter 2022 deliveries of 38 jets. Such improved deliveries must have bolstered sales for the Aerospace unit. However, supply-chain issues, along with uncertainty in getting Federal Aviation Administration certification for G700, may have negatively impacted the revenue performance of this segment in the fourth quarter.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the fourth quarter is pegged at $3,390.2 million. This indicates a 38.4% increase from revenues reported in the year-ago quarter.
Marine Systems Holds Growth Potential
The Marine Systems unit’s revenues are likely to have benefited from the Columbia-class construction and engineering in the soon-to-be-reported quarter. However, the late product deliveries from the Electric Boat unit due to supply-chain constraints are likely to have impacted this segment’s fourth-quarter results.
The Zacks Consensus Estimate for the Marine segment’s revenues in the fourth quarter is pegged at $2,975.3 million. This reflects a mere 0.2% rise from the year-ago quarter’s reported figure.
Combat Systems’ Sales to Remain Strong
Strong demand for munitions and international combat vehicles, particularly at OTS and European land systems units, is likely to have added impetus to Combat Systems’ fourth-quarter revenues.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the fourth quarter is pegged at $2,186.7 million. This indicates a 0.4% rise from the year-ago quarter’s reported figure.
Technologies Unit to Witness Steady Revenues
Increased demand across the defense and federal civilian portfolios and stability in cyber and naval platform markets are likely to have favored the Technologies unit’s revenues in the fourth quarter of 2023. However, the negative impact of the pandemic-induced supply chain may have offset the positives in the fourth quarter.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the fourth quarter is pegged at $3,152 million. This calls for a 3.1% 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 year-over-year growth rate of 4.6% for GD’s backlog in the fourth quarter of 2023, indicating high demand for General Dynamics’ products and services.
An Overall View
The strong performance of the company’s Aerospace segment may have improved General Dynamics’ top and bottom lines in the fourth quarter. Also, the aggregate impact of adjustments in contract estimates can be expected to have aided its earnings performance.
However, supply-chain challenges might have had an adverse impact on overall quarterly performance.
General Dynamics Corporation Price and EPS Surprise
The Zacks Consensus Estimate for GD’s fourth-quarter revenues is pegged at $11.52 billion, suggesting a 6.2% rise from the year-ago quarter.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $3.73 per share, indicating a rise of 4.2% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model does not predict 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 not the case here, as given below.
General Dynamics has an Earnings ESP of -5.74% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are three defense companies that you may want to consider, as these have the right combination of elements to post an earnings beat this season:
The Zacks Consensus Estimate for Boeing’s fourth-quarter loss per share is pegged at 72 cents, which indicates an improvement from the prior-year reported loss figure of $1.75. The Zacks Consensus Estimate for BA’s sales is pegged at $21.23 billion, suggesting growth of 6.2% from the prior-year reported figure.
Northrop Grumman (NOC - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #3 at present. NOC delivered a four-quarter average earnings surprise of 6.79%.
The Zacks Consensus Estimate for NOC’s fourth-quarter sales is pegged at $10.44 billion, suggesting a rise of 4% from the prior-year reported figure. The Zacks Consensus Estimate for its fourth-quarter earnings implies a decline of 23.3% from the prior-year reported figure.
Spirit AeroSystems Holdings Inc. (SPR - Free Report) has an Earnings ESP of +24.81% and a Zacks Rank #3 at present. The long-term earnings growth rate of SPR is 8.5%.
The Zacks Consensus Estimate for SPR’s fourth-quarter sales is pegged at $1.74 billion, suggesting growth of 31.5% from the prior-year reported figure. The Zacks Consensus Estimate for its fourth-quarter loss per share is pegged at $1.32, suggesting an improvement from the prior-year reported loss figure of $1.46.
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Will Aerospace Unit Drive General Dynamics' (GD) Q4 Earnings?
General Dynamics Corporation (GD - Free Report) is set to release fourth-quarter and full-year 2023 results on Jan 24 before market open.
General Dynamics delivered an earnings surprise of 3.68% in the last four quarters, on average. The strong performance from its Aerospace unit is likely to have boosted its overall fourth-quarter results amid supply chain woes.
Aerospace Unit to Witness Strong Growth
Strong revenues from service activity, backed by solid commercial air traffic, are likely to have contributed to the overall revenue performance of this segment in the soon-to-be-reported quarter.
Within this segment, the Gulfstream unit expects 40-45 aircraft deliveries during the quarter, which implies improvement from fourth-quarter 2022 deliveries of 38 jets. Such improved deliveries must have bolstered sales for the Aerospace unit. However, supply-chain issues, along with uncertainty in getting Federal Aviation Administration certification for G700, may have negatively impacted the revenue performance of this segment in the fourth quarter.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the fourth quarter is pegged at $3,390.2 million. This indicates a 38.4% increase from revenues reported in the year-ago quarter.
Marine Systems Holds Growth Potential
The Marine Systems unit’s revenues are likely to have benefited from the Columbia-class construction and engineering in the soon-to-be-reported quarter. However, the late product deliveries from the Electric Boat unit due to supply-chain constraints are likely to have impacted this segment’s fourth-quarter results.
The Zacks Consensus Estimate for the Marine segment’s revenues in the fourth quarter is pegged at $2,975.3 million. This reflects a mere 0.2% rise from the year-ago quarter’s reported figure.
Combat Systems’ Sales to Remain Strong
Strong demand for munitions and international combat vehicles, particularly at OTS and European land systems units, is likely to have added impetus to Combat Systems’ fourth-quarter revenues.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the fourth quarter is pegged at $2,186.7 million. This indicates a 0.4% rise from the year-ago quarter’s reported figure.
Technologies Unit to Witness Steady Revenues
Increased demand across the defense and federal civilian portfolios and stability in cyber and naval platform markets are likely to have favored the Technologies unit’s revenues in the fourth quarter of 2023. However, the negative impact of the pandemic-induced supply chain may have offset the positives in the fourth quarter.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the fourth quarter is pegged at $3,152 million. This calls for a 3.1% 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 year-over-year growth rate of 4.6% for GD’s backlog in the fourth quarter of 2023, indicating high demand for General Dynamics’ products and services.
An Overall View
The strong performance of the company’s Aerospace segment may have improved General Dynamics’ top and bottom lines in the fourth quarter. Also, the aggregate impact of adjustments in contract estimates can be expected to have aided its earnings performance.
However, supply-chain challenges might have had an adverse impact on overall quarterly performance.
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation price-eps-surprise | General Dynamics Corporation Quote
Q4 Estimates
The Zacks Consensus Estimate for GD’s fourth-quarter revenues is pegged at $11.52 billion, suggesting a 6.2% rise from the year-ago quarter.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $3.73 per share, indicating a rise of 4.2% from the prior-year reported figure.
What the Zacks Model Unveils
Our proven model does not predict 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 not the case here, as given below.
General Dynamics has an Earnings ESP of -5.74% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are three defense companies that you may want to consider, as these have the right combination of elements to post an earnings beat this season:
Boeing (BA - Free Report) has an Earnings ESP of +12.32% and a Zacks Rank #3 at present. The long-term earnings growth rate of BA is 4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boeing’s fourth-quarter loss per share is pegged at 72 cents, which indicates an improvement from the prior-year reported loss figure of $1.75. The Zacks Consensus Estimate for BA’s sales is pegged at $21.23 billion, suggesting growth of 6.2% from the prior-year reported figure.
Northrop Grumman (NOC - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #3 at present. NOC delivered a four-quarter average earnings surprise of 6.79%.
The Zacks Consensus Estimate for NOC’s fourth-quarter sales is pegged at $10.44 billion, suggesting a rise of 4% from the prior-year reported figure. The Zacks Consensus Estimate for its fourth-quarter earnings implies a decline of 23.3% from the prior-year reported figure.
Spirit AeroSystems Holdings Inc. (SPR - Free Report) has an Earnings ESP of +24.81% and a Zacks Rank #3 at present. The long-term earnings growth rate of SPR is 8.5%.
The Zacks Consensus Estimate for SPR’s fourth-quarter sales is pegged at $1.74 billion, suggesting growth of 31.5% from the prior-year reported figure. The Zacks Consensus Estimate for its fourth-quarter loss per share is pegged at $1.32, suggesting an improvement from the prior-year reported loss figure of $1.46.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.