Q3 Results: General Dynamics backlog up 21% at over $80bn


General Dynamics (GD) has posted Q3 2020 net earnings of $834m and revenue of $9.4bn. Whilst the firm’s total backlog at the end of the quarter was up 21% from Q3 2019 at $81.5bn.

“As we manage through this challenging time, we remain focused on the basics of operating performance, especially cash conversion and the early and aggressive management of costs, as evidenced this quarter by our strong operating margin and return on sales,” said Phebe N. Novakovic, chairman and chief executive officer. “Moreover, we continue to reduce debt and invest in the company for future growth.”

Diluted earnings per share (EPS) were $2.90. Revenue was up 1.8% over the previous quarter, while net earnings and diluted EPS grew 33%.

The operating margin across GD for the quarter was 11.5%, a 240 basis-point increase from the previous quarter, with a substantial increase of 620 basis points in the Aerospace segment’s margin. Return on sales was 8.8%, a 210 basis-point increase over the previous quarter.

Net cash provided by operating activities in the quarter totalled $1.1bn. While free cash flow from operations came to $903 million, a 108% conversion of net earnings.

In the third quarter, the company reduced its net debt by $388m to $11.9bn, a decrease of 3.2% from the previous quarter. Capital expenditures were $216m, or 2.3% of revenue.