General Dynamics (GD) Q4 Earnings Miss Estimates, Sales Down Y/Y

Zacks Equity Research
·4-min read

General Dynamics Corporation GD reported fourth-quarter 2020 earnings from continuing operations of $3.49 per share, which missed the Zacks Consensus Estimate of $3.55 by 1.7%. The bottom line, moreover, declined 0.6% from the prior-year quarter’s $3.51 per share.

The company reported GAAP earnings of $3.50 per share compared with the year-ago quarter’s $3.53.

For 2020, earnings were $11 per share, down 8.2% from $11.98 in the year-ago quarter. Moreover, full-year earnings missed the Zacks Consensus Estimate of $11.06 by 0.5%.

Total Revenues

General Dynamics’ fourth-quarter revenues of $10,481 million missed the Zacks Consensus Estimate of $10,854 million by 3.4%. Further, revenues declined 2.7% from $10,773 million in the year-ago quarter.

In 2020, total revenues declined 3.6% year over year to $37.93 billion. Full-year revenues missed the Zacks Consensus Estimate of $38.28 billion by 0.9%.

Backlog

The company recorded a total backlog of $89.5 billion, up 2.9% year over year. Funded backlog at the quarter-end was $45.2 billion. The total estimated contract value, representing the sum of all backlog components, was $134.7 billion, up 6.7% year over year.

Segment Performance

Aerospace: The segment reported revenues of $2,435 million, down 16.9% year over year. Operating earnings of $401 million declined 16.5% from the prior-year quarter’s $480 million.

Combat Systems: Segment revenues declined 0.6% from the prior-year quarter to $1,960 million. However, operating earnings were up 8.8% from the year-ago quarter to $309 million.

Technologies: The segment reported revenues of $3,229 million, which declined 2.3% year over year. Operating earnings of $352 million decreased 2.2% from the prior-year quarter’s $360 million.

Marine Systems: The segment’s revenues of $2,857 million were up 11.4% from the year-ago quarter’s $2,564 million. Operating earnings also improved 24.1% year over year to $247 million.

Operational Highlights

The company-wide operating margin was 12.3%, up 90 basis points from the prior quarter.

In the quarter under review, General Dynamics’ operating costs and expenses declined 2.9% from the year-ago period to $9,188 million.

Interest expenses in the reported quarter amounted to $120 million, up from $110 million reported in the year-ago quarter.

General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation Price, Consensus and EPS Surprise
General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation price-consensus-eps-surprise-chart | General Dynamics Corporation Quote

Financial Condition

As of Dec 31, 2020, General Dynamics’ cash and cash equivalents were $2,824 million compared with $902 million as of Dec 31, 2019.

Long-term debt as of Dec 31, 2020, was $9,995 million compared with the 2019-end level of $9,010 million.

As of Dec 31, the company’s cash provided by operating activities was $3,858 million compared with $2,981 million as of 2019-end.

Zacks Rank

General Dynamics currently carries a Zacks Rank #4 (Sell).

Recent Defense Releases

Lockheed Martin Corp. LMT reported fourth-quarter 2020 earnings from continuing operations of $6.38 per share, which came in line with the Zacks Consensus Estimate.

Hexcel Corporation HXL reported fourth-quarter 2020 loss of 18 cents per share, in line with the Zacks Consensus Estimate.

An Upcoming Defense Release

Huntington Ingalls HII, a Zacks Rank #3 (Hold) company, is set to release results on Feb 11. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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