General Dynamics (GD) Beats Q4 Earnings, Revenues Up Y/Y
General Dynamics Corporation GD 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.
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.
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.
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.
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.
General Dynamics carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Upcoming Peer Releases
Northrop Grumman Corporation NOC is expected to report fourth-quarter 2017 results on Jan 25 and the Zacks Consensus Estimate is currently pegged at $2.75. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a positive average surprise of 17.24%.
Raytheon Company RTN is expected to report fourth-quarter 2017 results on Jan 25 and the Zacks Consensus Estimate is currently pegged at $2.02. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a positive average surprise of 6.50%.
L3 Technologies, Inc. LLL is expected to report fourth-quarter 2017 results on Jan 25 and the Zacks Consensus Estimate is currently pegged at $2.31. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a positive average surprise of 9.13%.
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