General Dynamics (NYSE:GD) reported stronger-than-expected second-quarter results on Wednesday, sending its shares higher in premarket trading on the back of impressive order growth and solid financial execution.
Earnings per share came in at $3.74 for the quarter, outpacing Wall Street’s forecast of $3.44. Revenue climbed to $13.04 billion, comfortably ahead of the $12.18 billion consensus.
The stock was up 1.7% as of 07:00 ET (11:00 GMT), reflecting investor optimism following the beat.
The defense contractor also reported strong cash generation, with operating cash flow reaching $1.6 billion, or 158% of net income.
“During the first half of the year, each of our four segments achieved growth in revenue and earnings, with margins on a companywide basis expanding 50 basis points over the same period last year,” said Chairman and CEO Phebe Novakovic. “Our strong cash flow and healthy backlog position us well to have a good second half,” she added.
New orders were particularly strong in the Marine Systems and Aerospace divisions. The overall book-to-bill ratio stood at a healthy 2.2-to-1, while the defense business segments posted a ratio of 2.4-to-1 and Aerospace came in at 1.3-to-1.
Total orders hit $28.3 billion during the quarter, pushing the company’s backlog to $103.7 billion. When factoring in management’s estimate of additional contract opportunities, the potential total contract value rises to $161.2 billion.
General Dynamics also returned value to shareholders and strengthened its balance sheet. The company paid out $402 million in dividends, spent $198 million on capital expenditures, and reduced total debt by $897 million. It closed the quarter with $1.5 billion in cash and $8.7 billion in outstanding debt.
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