Latest news with #PhebeNovakovic
Yahoo
09-05-2025
- Business
- Yahoo
Q1 Earnings Outperformers: General Dynamics (NYSE:GD) And The Rest Of The Defense Contractors Stocks
Let's dig into the relative performance of General Dynamics (NYSE:GD) and its peers as we unravel the now-completed Q1 defense contractors earnings season. Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia's invasion of Ukraine or China's aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds. The 13 defense contractors stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 1.6% while next quarter's revenue guidance was in line. In light of this news, share prices of the companies have held steady as they are up 1.1% on average since the latest earnings results. Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products. General Dynamics reported revenues of $12.22 billion, up 13.9% year on year. This print exceeded analysts' expectations by 1.8%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts' adjusted operating income estimates but a significant miss of analysts' backlog estimates. "We continue to see steady growth and improvement in operating performance across the defense portfolio," said Phebe Novakovic, chairman and chief executive officer "The Aerospace segment saw a significant increase in profitability, reflecting the manufacturing efficiencies associated with reaching higher levels of production on our new aircraft models." The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $271.90. Is now the time to buy General Dynamics? Access our full analysis of the earnings results here, it's free. Formed through the split of IT services company SAIC, Leidos (NYSE:LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets. Leidos reported revenues of $4.25 billion, up 6.8% year on year, outperforming analysts' expectations by 3.6%. The business had a very strong quarter with an impressive beat of analysts' backlog and EBITDA estimates. The market seems happy with the results as the stock is up 5.2% since reporting. It currently trades at $155.50. Is now the time to buy Leidos? Access our full analysis of the earnings results here, it's free. Responsible for the development of the first stealth bomber, Northrop Grumman (NYSE:NOC) specializes in providing aerospace, defense, and security solutions for various industry applications. Northrop Grumman reported revenues of $9.47 billion, down 6.6% year on year, falling short of analysts' expectations by 4.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts' expectations. Northrop Grumman delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 9.2% since the results and currently trades at $482. Read our full analysis of Northrop Grumman's results here. Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries. RTX reported revenues of $20.31 billion, up 5.2% year on year. This print topped analysts' expectations by 1.7%. Overall, it was a strong quarter as it also logged an impressive beat of analysts' EBITDA estimates. The stock is up 2% since reporting and currently trades at $128.49. Read our full, actionable report on RTX here, it's free. Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services. Leonardo DRS reported revenues of $799 million, up 16.1% year on year. This number beat analysts' expectations by 9.2%. It was a very strong quarter as it also recorded a solid beat of analysts' adjusted operating income estimates and an impressive beat of analysts' EPS estimates. Leonardo DRS scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 11.7% since reporting and currently trades at $41.27. Read our full, actionable report on Leonardo DRS here, it's free. In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump's presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. 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Yahoo
24-04-2025
- Business
- Yahoo
GD Q1 Earnings Call: Aerospace Growth and Tariff Uncertainty Shape Outlook
Aerospace and defense company General Dynamics (NYSE:GD) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 13.9% year on year to $12.22 billion. Its non-GAAP profit of $3.66 per share was 5.3% above analysts' consensus estimates. Is now the time to buy GD? Find out in our full research report (it's free). Revenue: $12.22 billion vs analyst estimates of $12 billion (13.9% year-on-year growth, 1.8% beat) Adjusted EPS: $3.66 vs analyst estimates of $3.48 (5.3% beat) Adjusted EBITDA: $1.49 billion vs analyst estimates of $1.45 billion (12.2% margin, 2.7% beat) Operating Margin: 10.4%, in line with the same quarter last year Free Cash Flow was -$290 million compared to -$437 million in the same quarter last year Backlog: $88.66 billion at quarter end, down 5.4% year on year Market Capitalization: $71.21 billion General Dynamics' Q1 results were primarily driven by increased aircraft deliveries and ongoing momentum in its defense businesses. CEO Phebe Novakovic highlighted the ramp-up in Gulfstream G700 deliveries and noted, "We saw improved margins on our G700 deliveries," pointing to the introduction of newer models as a significant factor. The Technologies segment also contributed with consistent order activity, while Combat and Marine Systems benefited from stable demand and productivity gains, though supply chain challenges persisted. Looking forward, management discussed the potential impact of recently announced tariffs and evolving government procurement priorities, particularly in aerospace. Novakovic acknowledged uncertainty, stating, "We do not know the scope and breadth of the tariffs issue at the moment and will not for a while." The company expects improved cash flow in the coming quarters, but remains cautious about macroeconomic risks and ongoing discussions with government customers regarding cost savings and contract structures. General Dynamics' first quarter performance reflected robust aircraft deliveries and stable demand across core defense segments, with management addressing both operational improvements and emerging uncertainties. Gulfstream G700 Drives Aerospace: The significant year-on-year increase in Aerospace revenue was attributed to a 50% rise in aircraft deliveries, including the introduction of 13 G700 jets. Margins in this segment improved due to scale and the gradual resolution of supply chain issues, though management noted the delivery cadence will normalize through the year. G800 Certification Completed: The recent certification of the G800 by U.S. and European aviation authorities positions the company for expanded deliveries and future demand stimulation. Management expects the G800's entry into service to support ongoing aerospace growth. Technologies Segment Order Strength: Technologies reported a book-to-bill ratio above 1.0, supported by demand for advanced IT and mission systems solutions. Management noted ongoing customer conversations around cost savings and contract structures, particularly outcome-based contracts, which could shape future margins. Defense Segment Steady, but Supply Chain a Challenge: Combat and Marine Systems continued to see strong demand, especially from European customers and the U.S. Navy. However, Novakovic acknowledged persistent supply chain delays and quality issues, as well as the need for ongoing workforce expansion and productivity gains in shipbuilding. Tariff and Macroeconomic Uncertainty: Management raised concerns regarding the potential impact of new tariffs on both aerospace and defense businesses but stopped short of providing estimates, citing a lack of clarity on how these might affect demand and cost structures in coming quarters. Management's outlook for the remainder of the year centers on sustained demand for new aircraft, ongoing defense contract execution, and sensitivity to global trade policy changes. Tariff Impact on Aerospace: Uncertainty around the magnitude and duration of new tariffs could influence export demand for Gulfstream jets and input costs, with management monitoring the situation closely. Government Procurement and Cost Pressures: Shifts in U.S. government procurement strategies, including efforts to drive cost savings and contract reforms, may alter margin profiles and award timing, especially in the Technologies segment. Supply Chain and Workforce Stability: Continued improvement in supply chain reliability and workforce productivity, particularly in shipbuilding and defense production, are necessary to maintain growth and meet delivery targets. Peter Arment (Baird): Asked about visibility into Technologies segment bookings amid administration-driven cost savings efforts. Management noted ongoing discussions but highlighted a strong order book for the quarter. David Strauss (Barclays): Questioned the effect of recent tariff announcements on Gulfstream order activity. Novakovic responded that the pipeline remains strong, though customers are cautious about potential tariff impacts. Ken Herbert (RBC Capital Markets): Requested commentary on Gulfstream delivery cadence for the remainder of the year. Management indicated deliveries should remain consistent with previous estimates, barring significant supply chain disruptions. Gavin Parsons (UBS): Inquired about margin progression in Aerospace and the effect of G800 certification on future orders. Novakovic confirmed that G800 margins are expected to be higher and that certification is generating customer interest. Andre Madrid (BTIG): Raised concerns about potential trade tensions impacting European defense sales. Management emphasized that European operations are locally integrated, with strong demand persisting in the region. In the coming quarters, our analysts will monitor (1) the pace of Gulfstream G800 and G700 deliveries and their impact on Aerospace growth, (2) the resolution of supply chain and workforce challenges, particularly in shipbuilding, and (3) any quantifiable effects from the introduction of new tariffs on both demand and margin profiles. The company's ability to adapt to evolving government procurement models and manage contract risk will also be key factors shaping near-term results. General Dynamics currently trades at a forward P/E ratio of 18.1×. Is the company at an inflection point that warrants a buy or sell? Find out in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. 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Epoch Times
24-04-2025
- Business
- Epoch Times
General Dynamics Profits Jet Higher on Sales of Business Aircraft
General Dynamics' profits jumped more than 27 percent in the first quarter as the company's aerospace business is expected to begin making deliveries of its new long-range executive jet later this summer. Based in Reston, Virginia, the aerospace and military contractor provides a range of products and services for the Pentagon and other U.S. government agencies, as well as private sector and commercial customers worldwide. In a conference call with Wall Street analysts on April 23, General Dynamics CEO Phebe Novakovic said the company's four business segments saw increases in earnings and revenue compared to a year ago. She noted the company's growth and strong performance in the defense and aerospace sectors, which saw a 50 percent increase in aircraft deliveries. 'This business has become a real jewel. In summary, the aerospace team has had a good quarter,' Novakovic said of the company's Gulfstream subsidiary and jet aviation business. During the quarter, Gulfstream delivered 36 business jets to customers worldwide, including 13 of its new ultra-large-cabin G700 aircraft that can carry up to 19 passengers. A year ago, Gulfstream delivered its first G700 to customers, providing the company with a new flagship executive jet to rival Bombardier's Global 7500 and Dassault Falcon's new 10X entry. Last week, Gulfstream also announced that the company's new G800 was certified by the Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency. Produced at the Savannah, Georgia, production facility, the G800 is billed as the world's longest-range business jet, capable of traveling over 8,200 nautical miles (9,400 miles) at speeds nearing Mach 0.935. Related Stories 4/23/2025 4/22/2025 Gulfstream's fleet of executive business aircraft also includes the G400, G500, G600, and G650. The latter recently recorded the farthest and fastest flight in business aviation history, traveling from Singapore to Tucson, Arizona, a distance of about 9,200 miles, in just over 15 hours, and completed production in February. Since then, the new executive jet entry has moved to the company's completion center in Appleton, Wisconsin, where the first G650 will be delivered to the first customer later this year. During the conference call, Novakovic also highlighted General Dynamics' position as one of the nation's top prime defense contractors, providing a full spectrum of technology, artificial intelligence, and machine learning services and products to military, intelligence, and federal civilian customers. Under the company's combat and marine subsidiaries, the prime defense contractor General Dynamics' brand-name products for the U.S. military include the M1 Abrams tank, Virginia-Class submarines, and Stryker anti-tank missiles and armored vehicles used by Ukraine in the ongoing war with Russia. 'Demand for combat system products continues to be robust, with particular strength in Europe,' said Novakovic, citing 'the heightened threat environment' globally. The General Dynamics chief executive said that in addition to recent contracts exceeding $1 billion to supply the U.S. Army with battlefront combat vehicles, which Ukrainian soldiers are now using against Russian infantry, the company is also working with the Pentagon to accelerate the modernization of the Abrams M-1 tank. In late 2023, the U.S. Army first After earlier upgrades in 2018, the new Army tank is considered the world's most lethal battlefield tank. Army officials have said publicly that the latest version will be updated with the latest modular systems, allowing quicker technological upgrades and requiring fewer resources. 'We are rapidly increasing munitions capacity and production with the opening of our projectile facility in Texas and our load, assembly, and pack facility in Arkansas,' Novakovic confirmed. 'All in all, combat had a solid quarter and is off to a good start for the year.' General Dynamics On a company-wide basis, orders in the quarter totaled $10.2 billion, and backlog at the end of the quarter was $88.7 billion. As the Trump administration and Elon Musk's Department of Government Efficiency (DOGE) move forward with In response to analyst questions about the impact of Trump administration tariffs, trade policy, and possible DOGE and Department of Defense budget cuts on company operations, the General Dynamics CEO said the company preferred to hold comments until more information is available. 'If I were more specific, I would be wrong. I am just really sharing how we see it from our foxhole,' said Novakovic. 'Rumors are rampant, and I just want to see what the [Trump] budget shows.' Taking a page from a growing number of Fortune 500 companies, Novakovic said General Dynamics would not revise or update its yearly financial forecast. Earlier in January, the company provided earnings per share guidance of $14.75 billion to $14.85 billion for the first quarter, compared to the consensus earnings per share estimate of $13.7 billion. In Wednesday's New York Stock Exchange session, General Dynamics' shares settled at $265.53, down $9.27 or 3.3 percent.
Yahoo
23-04-2025
- Business
- Yahoo
General Dynamics (NYSE:GD) Exceeds Q1 Expectations
Aerospace and defense company General Dynamics (NYSE:GD) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 13.9% year on year to $12.22 billion. Its GAAP profit of $3.66 per share was 5.7% above analysts' consensus estimates. Is now the time to buy General Dynamics? Find out in our full research report. Revenue: $12.22 billion vs analyst estimates of $12 billion (13.9% year-on-year growth, 1.8% beat) EPS (GAAP): $3.66 vs analyst estimates of $3.46 (5.7% beat) Adjusted EBITDA: $1.43 billion vs analyst estimates of $1.45 billion (11.7% margin, 1.5% miss) Operating Margin: 10.4%, in line with the same quarter last year Free Cash Flow was -$290 million compared to -$437 million in the same quarter last year Backlog: $88.7 billion at quarter end, down 5.4% year on year Market Capitalization: $73.64 billion "We continue to see steady growth and improvement in operating performance across the defense portfolio," said Phebe Novakovic, chairman and chief executive officer "The Aerospace segment saw a significant increase in profitability, reflecting the manufacturing efficiencies associated with reaching higher levels of production on our new aircraft models." Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products. Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia's invasion of Ukraine or China's aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds. A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, General Dynamics's sales grew at a tepid 4.8% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a tough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. General Dynamics's annualized revenue growth of 11.1% over the last two years is above its five-year trend, suggesting its demand recently accelerated. We can better understand the company's revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. General Dynamics's backlog reached $88.7 billion in the latest quarter and was flat over the last two years. Because this number is lower than its revenue growth, we can see the company fulfilled orders at a faster rate than it added new orders to the backlog. This implies General Dynamics was operating efficiently but raises questions about the health of its sales pipeline. This quarter, General Dynamics reported year-on-year revenue growth of 13.9%, and its $12.22 billion of revenue exceeded Wall Street's estimates by 1.8%. Looking ahead, sell-side analysts expect revenue to grow 3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. General Dynamics has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.5%. Analyzing the trend in its profitability, General Dynamics's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q1, General Dynamics generated an operating profit margin of 10.4%, in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. General Dynamics's weak 4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For General Dynamics, its two-year annual EPS growth of 8.6% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point. In Q1, General Dynamics reported EPS at $3.66, up from $2.88 in the same quarter last year. This print beat analysts' estimates by 5.7%. Over the next 12 months, Wall Street expects General Dynamics's full-year EPS of $14.41 to grow 4.2%. We enjoyed seeing General Dynamics beat analysts' revenue expectations this quarter. We were also happy its EPS outperformed Wall Street's estimates. On the other hand, its backlog missed significantly and its EBITDA fell slightly short of Wall Street's estimates. Overall, this quarter was mixed. The stock remained flat at $274.12 immediately following the results. General Dynamics underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Yahoo
23-04-2025
- Business
- Yahoo
General Dynamics profit rises on sustained defense demand
(Reuters) -General Dynamics reported a 27% rise in first-quarter profit on Wednesday, driven by strength in its defense units owing to sustained demand for military munitions and vehicles amid geopolitical uncertainties. The Reston, Virginia-based company reported quarterly profit of $994 million or $3.66 per share, up from $799 million or $2.88 per share a year ago. Defense contractors continued to benefit from strong demand for weapons and other military equipment during the reported quarter owing to the ongoing Russia-Ukraine war. "We continue to see steady growth and improvement in operating performance across the defense portfolio," said CEO Phebe Novakovic. For the quarter ended March 30, the company's combat system's segment that makes weapon systems and military vehicles saw a 3.5% rise in revenue. Its nuclear-powered submarine-making marine systems segment also saw a 7.5% rise.
