General Dynamics reports $3.04 EPS for Q3

General Dynamics reported earnings per share of $3.04 for the third quarter (Q3), as the company’s top line jumped 6% year-on-year to $10.57bn supported by an increase in defence revenues.

Q3 earnings surpassed market estimates of $2.97 for the quarter under review.

Aerospace revenues fell by 17% year-on-year to $2bn. Gulfstream business jet deliveries declined to 27, of which 22 were large-cabin aircraft and five were mid-cabin ones, from 38 in the previous year.

Gulfstream is still awaiting certification from the Federal Aviation Administration (FAA) for its jets. The company is targeting to deliver 139-140 jets in 2023. It is likely to meet the target as it already has 40 G700s built up whereas the company is still awaiting guidance and certification for 19 G700s from the FAA.

The company reported a total record backlog of $96bn in Q3, up 1% on a quarter-on-quarter basis. “Aerospace received $2.9bn in new orders during the quarter, growing backlog to $20.1bn,” the company said in the earnings report.

Net cash provided by operating activities in the quarter totalled $1.3bn. After $227m in capital expenditures, the company generated free cash flow from operations of $1.1bn.

During the quarter, the company repaid $500m in fixed-rate notes, paid $363m in dividends, and used $56m to repurchase shares.

“Still no sign of that bizjet downturn – in fact the aerospace book to bill expanded in the quarter to 1.4x, though the dip in deliveries partially helped,” said Robert Stallard, partner at Vertical Research Partners.

Headquartered in Reston, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services.