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Will Solid Margins Bolster General Dynamics' Q2 Earnings?

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Key Takeaways

  • GD's Q2 revenues are projected at $12.35 billion, a 3.1% rise driven by Aerospace and Marine Systems growth.
  • Aerospace sales likely rose 2.2% on Gulfstream deliveries, while Marine revenue may climb 8.4%.
  • Combat and Technologies segments face revenue declines amid supply issues and program ramp-downs.

General Dynamics Corporation ((GD - Free Report) ) is set to release second-quarter 2025 results on July 23, 2025, before market open.

The company delivered a negative earnings surprise of 0.16% in the last four quarters, on average. The strong revenue performance across two of its major business segments and higher operating margins are likely to add impetus to its overall second-quarter results. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

GD’s Aerospace Unit to Post Solid Sales

Solid revenues earned from higher deliveries of the Gulfstream aircraft, in particular G700 jets, are likely to have bolstered the top line of the Aerospace business segment.

The Zacks Consensus Estimate for the Aerospace segment’s revenues in the second quarter is pegged at $3,005.2 million. This indicates a 2.2% increase from revenues reported in the year-ago quarter.

GD’s Marine Systems Unit Holds Potential

The Marine Systems unit’s revenues are likely to have benefited from the increased sales volume from the construction and engineering of major submarine programs like the Columbia-class and Virginia-class submarines.

The Zacks Consensus Estimate for the Marine segment’s revenues in the second quarter is pegged at $3,743.1 million. This calls for an 8.4% rise from the year-ago quarter’s figure.

GD’s Combat Systems Sales Likely to Decline

The global supply-chain disruptions resulting in plausible production delays, along with lower sales volume for some of its combat vehicles, are expected to have hurt GD’s Combat Systems’ sales in the second quarter.

The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the second quarter is pegged at $2,263 million. This indicates a drop of 1.1% from the year-ago quarter’s reported figure.

Moreover, in June 2025, the U.S. Army canceled its planned procurement of GD’s M10 Booker combat vehicles, reallocating budget to other modernization efforts. This is likely to have hurt production volume at this segment and reduced its backlog, which the second-quarter results are expected to duly reflect.

GD’s Technologies Unit Likely to Decrease

Lower volumes from C5ISR solutions due to unfavorable program timings and ramp-down of legacy programs are likely to have affected the Technologies unit’s revenues.

The Zacks Consensus Estimate for the Technologies segment’s revenues is pegged at $3,247.2 million. This indicates a decrease of 1.5% from the year-ago quarter’s figure.

GD’s Backlog Shows Decline

Our model indicates a year-over-year decline of 3.3% to $88.28 billion for GD’s backlog in the second quarter. This indicates that the company is likely to have faced some challenges in securing new contracts.

Q2 Expectations for GD

With two of General Dynamics’ segments implying solid top-line growth projections, the overall revenue growth prospects remain bright.

The Zacks Consensus Estimate for GD’s second-quarter revenues is pegged at $12.35 billion, which indicates a 3.1% rise from the year-ago quarter.

Such a solid top-line performance projection is likely to have aided GD’s bottom line. Also, improved year-over-year operating margins expected from the Aerospace, Marine Systems and Technologies segments are likely to have favorably impacted the company’s overall earnings.

The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $3.59 per share, which indicates a rise of 10.1% from the prior-year reported figure.

What the Zacks Model Unveils for GD

Our proven model predicts an earnings beat for General Dynamics this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as you will see below.

GD’s Earnings ESP: GD has an Earnings ESP of +1.51%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

GD’s Zacks Rank: General Dynamics currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Below, we have mentioned a few other players from the same sector that also have the right combination of elements to beat on earnings in the upcoming releases:

Textron Inc. ((TXT - Free Report) ) is set to report its second-quarter results on July 24, before market open. It has an Earnings ESP of +0.23% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for TXT’s earnings is pegged at $1.45 per share. The consensus estimate for its sales is pegged at $3.63 billion, indicating year-over-year growth of 2.9%.

L3Harris Technologies ((LHX - Free Report) ) is set to report its second-quarter 2025 results on July 24, before market open. It has an Earnings ESP of +0.46% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.48 per share. The consensus estimate for its sales is pegged at $5.30 billion, indicating year-over-year growth of 0.1%.

Transdigm Group ((TDG - Free Report) ) is expected to report fiscal third-quarter earnings soon. It has an Earnings ESP of +0.25% and carries a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for TDG’s earnings is pegged at $9.78 per share, indicating year-over-year growth of 8.7%. The consensus estimate for sales is pegged at $2.30 billion, indicating year-over-year growth of 12.2%.

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