Defense Company General Dynamics Stock Soars, Clocks Q3 Combat Systems Growth, Record Backlog

General Dynamics Corp GD reported third-quarter FY23 revenue growth of 6% year-over-year to $10.57 billion, beating the consensus of $10.04 billion. EPS of $3.04 (-6.7% Y/Y) beat the consensus of $2.91.

Operating earnings fell 3.7% Y/Y to $1.06 billion, and the margin contracted by 100 bps to 10%.

Revenue by segments: Aerospace $2.03 billion (-13.4% Y/Y), Marine Systems $3 billion (+8.4% Y/Y), Combat Systems $2.22 billion (+24.4% Y/Y) and Technologies $3.31 billion (+7.9% Y/Y).

General Dynamics generated an operating cash flow year-to-date of $3.51 billion compared to $3.91 billion a year ago. Free cash flow was $2.91 billion.

Net cash provided by operating activities for Q3 totaled $1.3 billion, or 158% of net earnings.

The total estimated contract value, the sum of all backlog components, was $132.86 billion (+5.6% Y/Y) at the end of the quarter.

Q3 consolidated book-to-bill ratio was 1.4-to-1. Company-wide backlog of $95.6 billion, up 7.6% Y/Y, highest in the company’s history.

In Q3 the company repaid $500 million in fixed-rate notes, $363 million in dividends, and used $56 million to repurchase shares.

“We continue to see strong demand and steady revenue growth across the business, resulting in significant growth in backlog,” said Phebe N. Novakovic, chairman and chief executive officer.

Price Action: GD shares are trading higher by 4.08% at $242.51 on the last check Wednesday.