General Dynamics Reports Strong Q4 Performance Amid Rising Defense Spending
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 18h ago
0mins
Source: seekingalpha
- Strong Financial Performance: General Dynamics reported fourth-quarter net earnings of $1.1 billion, or $4.17 per share, exceeding Wall Street's expectations of $4.11, with revenue of $14.4 billion surpassing the anticipated $13.76 billion, highlighting the company's robust performance amid rising global defense spending.
- Order and Backlog Growth: The company secured $22.4 billion in orders during the fourth quarter, resulting in a book-to-bill ratio of 1.6 for the quarter and 1.5 for the year, with a year-end backlog of $118 billion, reflecting a 30% increase from the previous year, indicating sustained demand in the defense sector.
- Cash Flow and Investment: General Dynamics generated $1.6 billion in operating cash flow in the fourth quarter, equivalent to 137% of net earnings, with full-year cash flow rising to $5.1 billion, demonstrating strong cash generation capabilities while investing $1.2 billion in capital expenditures, a 27% increase from the prior year.
- Segment Performance Variability: While aerospace revenue grew by 1.2%, operating earnings in that segment fell by 17.8%, contrasting with marine systems, which saw a 21.7% sales increase, illustrating the mixed performance across different business segments, with overall revenue growth of 10.1% reflecting the company's resilience in diversified operations.
Analyst Views on GD
Wall Street analysts forecast GD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GD is 386.85 USD with a low forecast of 360.00 USD and a high forecast of 410.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
7 Buy
8 Hold
0 Sell
Moderate Buy
Current: 366.620
Low
360.00
Averages
386.85
High
410.00
Current: 366.620
Low
360.00
Averages
386.85
High
410.00
About GD
General Dynamics Corporation is a global aerospace and defense company. It offers a portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions, and technology products and services. Its segments include Aerospace, Marine Systems, Combat Systems and Technologies. The Aerospace segment produces business jets and is the standard bearer in new technology aircraft, aircraft repair, customer support and custom completion services. The Marine Systems segment designs and builds nuclear-powered submarines and is engaged in surface combatant and auxiliary ship design and construction for the U.S. Navy. The Combat Systems segment manufactures land combat solutions worldwide, including wheeled and tracked combat vehicles, weapons systems and munitions. The Technologies segment provides a full spectrum of services, technologies and products to a range of military, intelligence, federal civilian and state customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
