General Dynamics earnings rise as aerospace deliveries climb
The aerospace and defense company reported diluted earnings per share of $4.24 for the second quarter.
General Dynamics (GD), the aerospace and defense company, reported a 13.4% increase in diluted earnings per share to $4.24 for the second quarter.
The results showed a divergence between bottom-line growth and top-line momentum. While earnings growth accelerated from the 12% increase seen in the first quarter, revenue growth slowed.
Revenue rose 8.1% year-over-year to $14.1 billion, a deceleration from the 10.3% growth reported in the prior quarter. Operating margin expanded 40 basis points year-over-year to 10.4%, though it compressed slightly from the 10.5% margin recorded in the first quarter.
Growth in the aerospace segment was supported by an increase in Gulfstream aircraft deliveries, which totaled 41 units compared to 38 units in the same period last year. The segment's book-to-bill ratio improved to 1.5x, up from 1.2x in the first quarter and 1.3x in the second quarter of 2024.
Company-wide demand signals shifted as the book-to-bill ratio declined to 1.4-to-1. This followed a 2-to-1 ratio in the first quarter and a 2.2-to-1 ratio in the second quarter of the previous year. Total estimated contract value also decreased to $186.9 billion from $188.4 billion at the end of the first quarter.
Despite the dip in contract value, total backlog rose to $136.5 billion. This figure represents a significant increase from the $103.7 billion backlog reported in the second quarter of 2024.
General Dynamics reduced its net debt to $3.18 billion as of July 5, 2024, down from $5.68 billion at the end of 2023.