General Dynamics (GD) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 18% year-over-year to $11.98B–$12B, with net earnings up 21.6% to $905M and diluted EPS up 20.7% to $3.26; strong growth was seen across all segments, especially Aerospace and Combat Systems.

• Operating margin increased to 9.7%, with operating earnings up 20.2% to $1.16B.

• Backlog at quarter-end was $91.3B, with total estimated contract value near $130B.

• Strong cash from operations at $814M, supporting investments, dividends, and share repurchases.

• Major contract wins and new product deliveries, including G700 certifications and deliveries, contributed to performance.

Financial highlights

• Q2 2024 revenue: $11.98B–$12B (+18% YoY); net earnings: $905M (+21.6% YoY); diluted EPS: $3.26 (+20.7% YoY); operating earnings: $1.16B (+20.2% YoY).

• Free cash flow for Q2: $613M (+18.1% YoY); cash from operations: $814M; cash balance: $1.4B; net debt: $7.9B.

• Year-to-date revenue: $22.7B (+13.3% YoY); net earnings: $1.7B; diluted EPS: $6.14.

• Book value per share at quarter-end: $80.20; debt-to-equity ratio: 42%.

• Backlog: $91.3B; total estimated contract value: nearly $130B.

Outlook and guidance

• 2024 EPS guidance raised to $14.40–$14.50; annual revenue expected at $47.8B–$48.2B, up ~$2B from prior guidance.

• Aerospace 2024 revenue expected at ~$12.7B, margin ~14%; Marine Systems at $13.4–$13.8B, margin ~7.4%; Combat Systems at ~$8.7B, margin ~14.4%; Technologies at ~$13B, margin ~9.5%.

• Full-year effective tax rate anticipated at ~17.5%.

• Cash conversion rate for the year targeted at ~100%, with most cash generation in Q4.

• Management highlighted continued ramp-up in G700 deliveries and growth in defense businesses.