General Dynamics (NYSE:GD) Announces Quarterly Earnings Results

Key Points

• General Dynamics reported strong Q1 results, with $4.10 EPS on $13.5B revenue—beating estimates and raising full‑year EPS guidance to $16.45–$16.55.
• The company produced exceptional cash and orders, delivering $2.2B operating cash flow (nearly $2B free cash flow) and ending the quarter with a record $131B backlog after >$26B of Q1 orders (book‑to‑bill ~2.0).
• Shares jumped about 10.4% to $346.45 after the print and the quarterly dividend was raised to $1.59, while management noted rising capex and supply‑chain/production pinch points plus roughly $1B of debt maturing in mid‑2026 as near‑term risks.

General Dynamics (NYSE:GD - Get Free Report) posted its quarterly earnings data on Wednesday. The aerospace company reported $4.10 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.67 by $0.43, Zacks reports. General Dynamics had a return on equity of 17.57% and a net margin of 8.01%.The firm had revenue of $13.48 billion for the quarter, compared to the consensus estimate of $12.64 billion. During the same quarter in the prior year, the business earned $3.66 EPS. The business's revenue for the quarter was up 10.3% compared to the same quarter last year.

Here are the key takeaways from General Dynamics' conference call:

• Reported strong Q1 results with $4.10 EPS on $13.5B revenue, beating consensus by $0.43 and raised full‑year EPS guidance to $16.45–$16.55.
• Exceptional cash and order performance: $2.2B operating cash flow (nearly $2B free cash flow, 174% conversion), ended with $3.7B cash and a record $131B backlog after >$26B of Q1 orders (book‑to‑bill 2.0).
• Segment momentum led by Marine Systems (21% revenue growth, 26.4% earnings improvement from higher throughput) and strong Aerospace results (highest Q1 Gulfstream deliveries, improved margins and early success of the G800); Technologies/Mission Systems also showed demand for AI, cyber and C4ISR capabilities.
• CapEx is stepping up (Q1 capex +40% to $203M; full‑year guide 3.5–4% of sales) as the company invests in shipyards and production capacity, which management says will front‑load cash usage even as annual free cash flow conversion remains targeted near 100% of net income.
• Near‑term risks include supply‑chain pinch points (single‑source complex components and potential labor impacts tied to the Middle East affecting some Gulfstream activity) and ~$1B of notes maturing in June/August 2026 that the company plans to refinance.

General Dynamics Trading Up 10.4%

Shares of General Dynamics stock traded up $32.77 on Wednesday, hitting $346.45. 1,624,565 shares of the company's stock traded hands, compared to its average volume of 1,413,934. The firm's 50-day moving average price is $346.00 and its two-hundred day moving average price is $346.24. The stock has a market capitalization of $93.83 billion, a PE ratio of 22.40, a price-to-earnings-growth ratio of 2.09 and a beta of 0.38. General Dynamics has a one year low of $266.98 and a one year high of $369.70. The company has a debt-to-equity ratio of 0.27, a current ratio of 1.44 and a quick ratio of 0.89.

General Dynamics Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, May 8th. Shareholders of record on Friday, April 10th will be given a dividend of $1.59 per share. This represents a $6.36 annualized dividend and a dividend yield of 1.8%. The ex-dividend date is Friday, April 10th. This is a positive change from General Dynamics's previous quarterly dividend of $1.50. General Dynamics's dividend payout ratio is presently 41.17%.

Insider Activity

In related news, VP Mark Rayha sold 4,370 shares of the company's stock in a transaction on Friday, February 13th. The shares were sold at an average price of $348.79, for a total value of $1,524,212.30. Following the completion of the sale, the vice president owned 7,936 shares in the company, valued at $2,767,997.44. This represents a 35.51% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO Phebe N. Novakovic sold 32,918 shares of the company's stock in a transaction on Wednesday, March 11th. The shares were sold at an average price of $354.09, for a total transaction of $11,655,934.62. Following the completion of the sale, the chief executive officer owned 766,457 shares of the company's stock, valued at approximately $271,394,759.13. This represents a 4.12% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 51,260 shares of company stock worth $18,133,971 in the last 90 days. Corporate insiders own 1.40% of the company's stock.

Institutional Trading of General Dynamics

A number of large investors have recently made changes to their positions in the company. Northern Trust Corp increased its position in shares of General Dynamics by 3.3% in the 4th quarter. Northern Trust Corp now owns 3,443,453 shares of the aerospace company's stock valued at $1,159,273,000 after buying an additional 110,536 shares in the last quarter. Invesco Ltd. boosted its stake in General Dynamics by 5.0% in the 4th quarter. Invesco Ltd. now owns 2,433,892 shares of the aerospace company's stock worth $819,394,000 after purchasing an additional 116,573 shares during the period. AQR Capital Management LLC boosted its stake in General Dynamics by 24.0% in the 4th quarter. AQR Capital Management LLC now owns 2,062,944 shares of the aerospace company's stock worth $694,511,000 after purchasing an additional 399,097 shares during the period. Charles Schwab Investment Management Inc. boosted its stake in General Dynamics by 1.4% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 1,630,611 shares of the aerospace company's stock worth $548,962,000 after purchasing an additional 22,473 shares during the period. Finally, Boston Partners boosted its stake in General Dynamics by 4.4% in the 3rd quarter. Boston Partners now owns 1,478,713 shares of the aerospace company's stock worth $504,742,000 after purchasing an additional 62,451 shares during the period. Institutional investors own 86.14% of the company's stock.

Wall Street Analysts Forecast Growth

Several research analysts have issued reports on the company. Morgan Stanley upped their price objective on General Dynamics from $408.00 to $410.00 and gave the stock an "overweight" rating in a report on Thursday, January 29th. Weiss Ratings reaffirmed a "buy (b)" rating on shares of General Dynamics in a report on Tuesday, April 21st. UBS Group set a $393.00 price objective on General Dynamics in a report on Thursday, January 29th. Wall Street Zen cut shares of General Dynamics from a "buy" rating to a "hold" rating in a research report on Saturday, January 31st. Finally, BNP Paribas Exane upped their target price on shares of General Dynamics from $410.00 to $430.00 and gave the company an "outperform" rating in a research report on Tuesday, April 7th. Two analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating, six have issued a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $389.78.

General Dynamics News Roundup

Here are the key news stories impacting General Dynamics this week:

• Positive Sentiment: Q1 earnings and revenue beat consensus — GD reported about $4.10–$4.11 EPS versus ~ $3.67 expected and revenue of ~$13.5B (up ~10% YoY), beating estimates and showing 12% profit growth. This is the primary catalyst for the stock move. PR Newswire: First-Quarter 2026 Financial Results
• Positive Sentiment: Revenue gains driven by marine and combat segments — Management cited strong marine-systems sales and continued combat program strength as key contributors to top-line growth. That segment mix supports higher-margin work and backlog visibility. WSJ: Sales Gain on Marine-Systems Growth
• Positive Sentiment: Strong cash flow and book-to-bill — GD generated ~$2.2B of operating cash and reported a roughly 2:1 book-to-bill, signaling robust order intake and cash conversion that support earnings durability. PR Newswire: First-Quarter 2026 Financial Results
• Positive Sentiment: Program awards and program progress — Recent contract wins and program activity (including submarine sustainment/support work and ARV pre‑production plans) add near-term revenue visibility and underline book-to-bill strength. Yahoo Finance: Submarine Program Award
• Neutral Sentiment: Analyst revisions and previews were mixed heading into the print — some estimates lagged despite strong defense demand, so further analyst action (upgrades/raises) will determine follow‑through. MSN: Q1 Earnings Preview
• Negative Sentiment: Sector headwinds could cap gains — broader defense names have been weak since geopolitical shocks (referenced in recent coverage), which can limit multiple expansion even after a beat. Yahoo Finance: Defense Stocks Weakness
• Negative Sentiment: Program execution and past stops remain a watch item — the company had a previously delayed ammunition plant matter (work stoppage) that investors had tracked; while recent reports say the Army will proceed, any lingering program or delivery issues would be a downside risk. TheStreet: War Department Win / Ammunition Plant Background

About General Dynamics

General Dynamics is a major American aerospace and defense contractor that designs, manufactures and supports a broad range of products and services for government and commercial customers worldwide. Headquartered in the United States (Reston, Virginia), the company supplies platforms and systems used by armed forces, civil authorities and private operators across multiple domains including air, land, sea and cyber.

Its principal activities span several operating businesses: a business aviation unit that develops and supports Gulfstream business jets; land systems that produce armored combat vehicles and related logistics and sustainment services; marine systems that design and construct submarines and surface ships for navies; and mission systems and information technology operations that provide command-and-control, communications, cybersecurity and systems-integration services.

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