GD Aerospace 2024 revenue grows 30.5%

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Gulfstream’s parent General Dynamics reported 30.5% year-over-year growth in revenue from aerospace at $11.2bn compared to $8.6bn. This was largely driven by the first deliveries of its G700 aircraft.

Much of the 2024 revenue growth came during the fourth quarter which was on account of higher deliveries and improved services.

“We had a solid fourth quarter, capping off a year that saw steady growth in revenue and earnings across all four segments,” said Phebe Novakovic, chairman and chief executive officer of General Dynamics. “Order activity continued to be very strong, with 1-to-1 book-to-bill for the year, even as revenue grew by 13%, positioning us well for continued growth.”

The company delivered 136 aircraft during the year compared to 111 in 2023. Some 118 of these were large-cabin aircraft.

Gulfstream’s book-to-bill ratio at the end of 2024 fell to 1.0x compared to 1.2x in 2023 owing to higher deliveries. Orders for the aerospace division clocked in at $11.3bn with  atotal backlog at the end of fourth quarter at $19.6bn. The company’s backlog at the end of fourth quarter 2023 was $20.4bn.

Higher deliveries translated into better operating earnings, which saw an increase of 23.9% year-on-year  to $1.5bn compared to $1.2bn in the same period last year. While operating earnings in 2024 grew 24%  in absolute terms, the division’s operating margin declined by 70 basis points to 13%.

Overall, General Dynamics reported 2024 revenue of $47.7bn – a growth of 12.9%YoY from last year with net earnings jumped by 14.1%YoY to $3.7bn.

The company recorded net cash from operating activities during the year at $4.1bn, or 109% of net earnings with investments of $916m in capex, tax payments of $560m along with repayment of $500m fixed-rate notes.

The company delivered nearly $3bn to shareholders through dividends and share repurchases while ending the year with $1.7bn in cash and equivalents on hand.

Fourth quarter delivers

While annual revenue grew by nearly one-thirds, majority of that contribution came from stellar fourth quarter performance which increased by 36.4%YoY to $3.7bn compared to $2.7bn in fourth quarter of 2023 – an increase of $1bn from last year.

Similarly, higher revenues translated to better operating earnings of $585m during the quarter – an increase of 30.3%YoY from last year. On the flipside, in line with the downward trend on annual basis, the operating margin shrank by 80 basis points to 15.6%.

Better than expected

Overall, the GD’s aerospace division’s performance was noticeably strong visible in its strong revenue growth and high deliveries – in the more profitable large-cabin aircraft. On the other hands, margins were weaker (both in fourth quarter and full-year) mainly on account of higher production costs.

“GD has seen a whole slew of rating downgrades over the last couple of months, and so we think expectations heading into the results were pretty depressed,” said Robert Stallard of Vertical Research Partners in his earnings review.

“As widely expected, Aerospace deliveries and revenues were not as strong as hoped while the Marine margin of 5.1% was also soft. But as this had been reflected in the consensus estimate, we don’t see the 4Q result being a negative surprise. What we still don’t know is what GD is guiding for 2025, and we expect that to be revealed on this morning’s conference call.”

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