Summary
General Dynamics Corporation (GD) reported a solid financial performance for the fiscal year ended December 31, 2017. The company experienced revenue growth primarily driven by its Aerospace and Combat Systems segments, with overall revenue reaching $30.97 billion. Operating earnings saw a significant increase of 11.9% to $4.18 billion, accompanied by an improved operating margin of 13.5%, up from 12.2% in the prior year. This profitability expansion was consistent across all business groups. The company maintained a robust backlog of $63.2 billion, indicating strong future revenue potential. GD also demonstrated strong cash flow generation, with free cash flow from operations of $3.45 billion, and continued to return value to shareholders through dividends and share repurchases. Management highlighted strategic investments in product development, particularly in the Aerospace segment with new aircraft models poised for 2018 entry into service, and favorable contract awards in defense segments. The company also announced its intent to acquire CSRA for $9.6 billion, expected to close in the first half of 2018, which signals a strategic expansion in its Information Systems and Technology capabilities.
Financial Highlights
56 data points| Revenue | $30.97B |
| Cost of Revenue | $24.73B |
| Gross Profit | $6.24B |
| Operating Expenses | $26.74B |
| Operating Income | $4.24B |
| Interest Expense | $117.00M |
| Net Income | $2.91B |
| EPS (Basic) | $9.73 |
| EPS (Diluted) | $9.56 |
| Shares Outstanding (Basic) | 299.17M |
| Shares Outstanding (Diluted) | 304.64M |
Key Highlights
- 1Revenue increased by 1.3% to $30.97 billion in 2017, driven by growth in Aerospace and Combat Systems.
- 2Operating earnings grew by 11.9% to $4.18 billion, with operating margin improving to 13.5% from 12.2% in 2016.
- 3Free cash flow from operations reached $3.45 billion, a significant increase from $1.81 billion in 2016.
- 4The company's total backlog stood strong at $63.2 billion, an increase of nearly $1 billion from the previous year.
- 5Aerospace segment revenue increased by 4.0% to $8.13 billion, with strong demand for Gulfstream aircraft and services, while preparing for new G500 and G600 aircraft deliveries.
- 6Combat Systems segment revenue increased by 7.6% to $5.95 billion, boosted by higher volumes in U.S. military vehicles and international programs like the AJAX program.
- 7The company returned $2.54 billion to shareholders in 2017 through share repurchases ($1.56 billion) and dividends ($0.99 billion).