We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
General Dynamics (GD) Down 2.8% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for General Dynamics Corporation (GD - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the market.
Will the recent negative trend continue leading up to its next earnings release, or is GD due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
General Dynamics Beats Q4 Earnings, Revenues Up Y/Y
General Dynamics reported fourth-quarter 2017 earnings from continuing operations of $2.50 per share, beating the Zacks Consensus Estimate of $2.37 by 5.5%. Reported earnings were up 6.8% from $2.36 recorded in the year-ago quarter.
Taking into account a $119 million one-time impact from tax reforms in the fourth quarter, GAAP earnings were $2.10.
Total Revenues
In the quarter, General Dynamics’ total revenues of $8,277 million missed the Zacks Consensus Estimate of $8,437 million by 1.9%.
However, reported revenues were up 8.2% from $7,654 million in the year-ago quarter. The year-over-year increase in total revenues was primarily due to rise in demand for the company’s products.
Segment Performance
Aerospace: The segment generated revenues of $1,982 million, up 8.6% year over year. Operating earnings of $340 million increased 24.1% from the prior-year quarter figure of $274 million.
Combat Systems: The segment’s revenues rose 5.2% to $1,748 million. Operating earnings were up 13.0% to $260 million in the quarter.
Information Systems and Technology: The segment generated revenues of $2,487 million, up 9.5%. Operating income rose 22.1% to $282 million.
Marine Systems: The segment’s revenues of $2,060 million were up 8.6% from the year-ago figure of $1, 897 million. Operating income improved 297.6% to $167 million.
Operational Highlights
The company recorded a total backlog of $63.2 billion, up 1.6% year over year. Including the value in unfunded indefinite delivery, indefinite quantity contracts and unexercised options total backlog at the end of 2017 was $88 billion.
Company-wide operating margin in the fourth quarter expanded 250 basis points (bps) to 12.5% from the year-ago level of 10.0%.
Operating income at the end of the quarter was $1,034 million compared with $768 million in the year-ago quarter.
Financial Condition
As of Dec 31, 2017, General Dynamics’ cash and cash equivalents were $2,983 million compared with $2,334 million as of Dec 31, 2016.
Long-term debt as of Dec 31, 2017 was $3,980 million, up from the 2016-end level of $2,988 million.
The company’s cash flow from operating activities was $3,879 million for 2017 compared with $2,198 million in 2016.
Free cash flow (cash flow from operating less capital expenditure) the end of the 2017 was $3,451 million compared with $1,806 million in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
At this time, GD has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our style scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions also indicates a downward shift. Notably, GD has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
General Dynamics (GD) Down 2.8% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for General Dynamics Corporation (GD - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the market.
Will the recent negative trend continue leading up to its next earnings release, or is GD due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
General Dynamics Beats Q4 Earnings, Revenues Up Y/Y
General Dynamics reported fourth-quarter 2017 earnings from continuing operations of $2.50 per share, beating the Zacks Consensus Estimate of $2.37 by 5.5%. Reported earnings were up 6.8% from $2.36 recorded in the year-ago quarter.
Taking into account a $119 million one-time impact from tax reforms in the fourth quarter, GAAP earnings were $2.10.
Total Revenues
In the quarter, General Dynamics’ total revenues of $8,277 million missed the Zacks Consensus Estimate of $8,437 million by 1.9%.
However, reported revenues were up 8.2% from $7,654 million in the year-ago quarter. The year-over-year increase in total revenues was primarily due to rise in demand for the company’s products.
Segment Performance
Aerospace: The segment generated revenues of $1,982 million, up 8.6% year over year. Operating earnings of $340 million increased 24.1% from the prior-year quarter figure of $274 million.
Combat Systems: The segment’s revenues rose 5.2% to $1,748 million. Operating earnings were up 13.0% to $260 million in the quarter.
Information Systems and Technology: The segment generated revenues of $2,487 million, up 9.5%. Operating income rose 22.1% to $282 million.
Marine Systems: The segment’s revenues of $2,060 million were up 8.6% from the year-ago figure of $1, 897 million. Operating income improved 297.6% to $167 million.
Operational Highlights
The company recorded a total backlog of $63.2 billion, up 1.6% year over year. Including the value in unfunded indefinite delivery, indefinite quantity contracts and unexercised options total backlog at the end of 2017 was $88 billion.
Company-wide operating margin in the fourth quarter expanded 250 basis points (bps) to 12.5% from the year-ago level of 10.0%.
Operating income at the end of the quarter was $1,034 million compared with $768 million in the year-ago quarter.
Financial Condition
As of Dec 31, 2017, General Dynamics’ cash and cash equivalents were $2,983 million compared with $2,334 million as of Dec 31, 2016.
Long-term debt as of Dec 31, 2017 was $3,980 million, up from the 2016-end level of $2,988 million.
The company’s cash flow from operating activities was $3,879 million for 2017 compared with $2,198 million in 2016.
Free cash flow (cash flow from operating less capital expenditure) the end of the 2017 was $3,451 million compared with $1,806 million in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
General Dynamics Corporation Price and Consensus
General Dynamics Corporation Price and Consensus | General Dynamics Corporation Quote
VGM Scores
At this time, GD has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our style scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions also indicates a downward shift. Notably, GD has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.