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General Dynamics (GD) Q2 Earnings In Line, '17 View Raised

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General Dynamics Corporation (GD - Free Report) reported second-quarter 2017 earnings from continuing operations of $2.45 per share, which came in line with the Zacks Consensus Estimate. Reported earnings were up 6.5% from $2.30 recorded in the year-ago quarter.

Total Revenue

General Dynamics’ second-quarter total revenue of $7,675 million missed the Zacks Consensus Estimate of $7,704 million by 1.7%. Reported revenues also dipped 1.3% from $7,774 million in the year-ago quarter.

Backlog

The company recorded a total backlog of $58.6 billion, down 10% year over year. Funded backlog at the quarter end was down 5.8% to $51.7 billion.

General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation Price, Consensus and EPS Surprise | General Dynamics Corporation Quote

Segment Performance

Aerospace: The segment reported revenues of $2,078 million, down 9% year over year. Operating earnings of $425 million increased 0.2% from the prior-year recorded figure of $424 million.

Combat Systems: Segment revenues rose 9% to $1,414 million. Operating earnings were up 9.8% to $225 million in the quarter.

Information Systems and Technology: The segment reported revenues of $2,104 million, down 5%. Operating income rose 2.6% to $240 million.

Marine Systems: The segment’s revenues of $2,079 million were up 5.1% from the year-ago figure of $1,978 million. Operating income also improved 3.5% to $178 million.

Operational Highlights

Company-wide operating margin expanded 60 basis points (bps) to 13.8% from the year-ago level of 13.2%.

In the quarter under review, General Dynamics’ operating costs and expenses declined 1.9% to $6,619 million.

Financial Condition

As of Jul 2, 2017, General Dynamics’ cash and cash equivalents were $1,856 million compared with $2,334 million as of Dec 31, 2016.

Long-term debt as of Jul 2, 2017 was $2,989 million, almost in line with the 2016-end level of $2,988 million.

As of Jul 2, 2017, the company’s cash flow from operating activities was around $1,010 million compared with $873 million in the year-ago period.

Free cash flow from operations at the end of the second quarter was $386 million, compared with $324 million in the previous year.

2017 Outlook

The company increased its EPS guidance for 2017 from the range of $9.50– $9.55 to $9.70–$9.75.

Zacks Rank

General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Peer Releases

Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2017 earnings from continuing operations of $3.23 per share, beating the Zacks Consensus Estimate of $3.10 by 4.2%. Earnings also surpassed the year-ago period’s bottom-line figure by 10.2%.

Textron Inc. (TXT - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of 60 cents per share, beating the Zacks Consensus Estimate of 55 cents by 9.1%.

The Boeing Company (BA - Free Report) reported adjusted earnings of $2.55 per share for second-quarter 2017, beating the Zacks Consensus Estimate of $2.32 by 9.9%. In the year-ago quarter, the company had reported a loss of 44 cents.

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