Summary
General Dynamics Corporation (GD) reported steady revenues for the second quarter of 2010 compared to the prior year, with consolidated revenues at $8.1 billion. However, for the first six months of the year, revenues saw a slight decline of 3.1% to $15.85 billion. Operating earnings showed strength, increasing by 4.2% to $985 million for the quarter and by 2.9% to $1.9 billion for the six-month period, demonstrating improved operating margins. The company also highlighted robust order activity in its defense segments, particularly Information Systems and Technology and Combat Systems, with a book-to-bill ratio of approximately one-to-one. Backlog remains substantial at $62.5 billion, with an estimated potential contract value of $21.7 billion, reflecting significant future revenue potential. Financially, the company managed its cash effectively, generating $687 million from operating activities in the first six months, though free cash flow saw a slight decrease to $564 million from $593 million in the prior year period. GD continues to return capital to shareholders through dividend increases and share repurchases, while also managing its debt levels, which resulted in a lower debt-to-equity ratio.
Financial Highlights
53 data points| Revenue | $8.10B |
| Cost of Revenue | $6.64B |
| Gross Profit | $1.46B |
| Operating Expenses | $7.12B |
| Operating Income | $985.00M |
| Interest Expense | $45.00M |
| Net Income | $648.00M |
| EPS (Basic) | $1.69 |
| EPS (Diluted) | $1.67 |
| Shares Outstanding (Basic) | 384.30M |
| Shares Outstanding (Diluted) | 388.53M |
Key Highlights
- 1Revenues were flat year-over-year for the quarter ($8.1 billion) but down 3.1% year-over-year for the six-month period ($15.85 billion).
- 2Operating earnings increased both for the quarter (up 4.2% to $985 million) and the six-month period (up 2.9% to $1.9 billion), with improved operating margins.
- 3The company reported a strong backlog of $62.5 billion and an increasing estimated potential contract value of $21.7 billion.
- 4Information Systems and Technology segment showed strong revenue growth (12.0% for the quarter), driven by tactical/strategic mission systems and IT services.
- 5Aerospace segment's operating earnings improved significantly despite lower revenues, driven by increased aircraft services and improved pre-owned aircraft sales.
- 6Combat Systems segment saw a revenue decline (-12.2% for the quarter) due to timing of program activity, but operating margins improved.
- 7Net cash provided by operating activities was $687 million for the first six months, while free cash flow from operations was $564 million.
- 8The company increased its quarterly dividend to $0.42 per share and continued share repurchases.