General Dynamics profit, revenue beat estimates on strong marine business, jet deliveries

Reuters

5 days ago

July 23 (Reuters) - General Dynamics' (GD.N), opens new tab second-quarter profit and revenue topped analyst estimates on Wednesday, driven by robust orders in its marine segment from Columbia- and Virginia-class submarine programs, boosting shares 5% in early trading.
The defense company's nuclear-powered submarine-making marine systems segment produced 22.2% more revenue. The unit is now expected to generate 2025 revenue of $15.6 billion with a 7% margin.
During the quarter, the Pentagon modified a submarine production contract awarded to the company's marine segment, raising the value by $1.85 billion.
The company entered into a new contract with union members at its submarine-making unit, averting a shortage of skilled labor that has contributed to delays in U.S. Navy shipbuilding schedules.
The technologies segment, which makes products for a range of military, intelligence, federal civilian, and state customers, generated 5.5% more revenue year-on-year.
Defense manufacturers benefited from strong demand for weapons and other military equipment during the quarter, owing to geopolitical uncertainty and ongoing conflicts in the Middle East.
New bookings during the quarter were 2.4 times its billing for General Dynamics' defense segments, indicating a strong order book.
However, revenue within the combat systems part of the defense business, which manufactures land combat vehicles, weapons systems, and munitions, edged down 0.2% after taking a hit from the cancellation of the M10 Booker contract by the Pentagon as well as production delays owing to supply chain woes.
Annual revenue in the combat segment is forecast to be $9.2 billion with a 14.5% margin.
The Reston, Virginia-based company's quarterly adjusted profit was $3.74 per share, compared with analysts' estimates of $3.53 per share, according to data compiled by LSEG.
It expects profit for the year to range between $15.05 and $15.15 per share.
General Dynamics' aerospace segment, which is recovering from supply chain problems and longer certification times, ramped up deliveries during the quarter ended June 29.
During the period, the Gulfstream jet maker's new G800 plane, the world's longest-range business aircraft, earned certification from the Federal Aviation Administration and the European Union Aviation Safety Agency. The plane has a range of 8,200 nautical miles (15,186 kilometers) at the Mach 0.85 long-range cruise speed, the company has said.
The segment's aircraft deliveries hit 38 in the second quarter, compared with 37 in the same period a year ago. In the first quarter, the company delivered 36 Gulfstream jets.
The aerospace unit's new bookings during the quarter were 1.3 times its billing.
"This is the strongest first half for orders since 2022 and reflected strong demand across the entire Gulfstream product line," Chief Financial Officer Kimberly Kuryea said on a call with analysts.
Revenue in the aerospace segment rose 4.1% from a year ago. Its annual revenue is estimated at $12.9 billion, with an operating margin of 13.5%.
General Dynamics' total quarterly revenue of $1.3 billion beat Wall Street analysts' estimate of $1.23 billion.
Total revenue for fiscal year 2025 is projected at $51.2 billion, with a 10.3% operating margin.