It has been about a month since the last earnings report for General Dynamics (GD). Shares have added about 0.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Dynamics due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for General Dynamics Corporation before we dive into how investors and analysts have reacted as of late.
General Dynamics' Q2 Earnings & Revenues Beat Estimates, Improve Y/Y
General Dynamics reported second-quarter 2025 earnings per share (EPS) of $3.74, which beat the Zacks Consensus Estimate of $3.59 by 4.2%. The bottom line also increased 14.7% from $3.26 recorded in the year-ago quarter.
The year-over-year bottom-line appreciation can be attributed to revenue growth as well as an improvement in operating earnings.
Total Revenues of GD
Revenues of $13.04 billion beat the Zacks Consensus Estimate of $12.35 billion by 5.6%. The top line also improved 8.9% from the prior-year figure.
The year-over-year improvement can be attributed to increased revenues from all of GD’s business segments, except Combat Systems.
GD’s Segmental Performance
Aerospace: The segment reported revenues of $3.06 billion, up 4.1% year over year. Operating earnings of $403 million improved 26.3% year over year.
Marine Systems: This segment’s revenues surged 22.2% from the year-ago quarter’s level to $4.22 billion. Operating earnings of $291 million improved 18.8% year over year.
Technologies: Revenues from this segment improved 5.5% year over year to $3.48 billion. Operating earnings totaled $332 million, which improved 3.8% year over year.
Combat Systems: The segmental top line of $2.28 billion slipped 0.2% from the year-ago quarter’s level. Operating earnings improved 3.54% year over year to $324 million.
Operational Highlights of GD
Operating earnings totaled $1.31 billion, up 12.9% from the year-ago quarter’s $1.04 billion.
Operating costs and expenses increased 8.5% year over year to $11.74 billion.
Interest expenses increased 4.8% year over year to $88 million.
GD’s Backlog
General Dynamics recorded a total backlog of $103.68 billion, much higher than the first-quarter 2025 level of $88.66 billion. The funded backlog at the end of the quarter was $83.88 billion.
Our model projected a backlog of $88.28 billion for the second quarter.
Financial Condition of GD
As of June 29, 2025, cash and cash equivalents totaled $1.52 billion compared with $1.70 billion as of Dec. 31, 2024.
The long-term debt as of the same date was $7.51 billion, higher than the 2024-end debt level of $7.26 billion.
During the first six months of 2025, cash generated by operating activities totaled $1.45 billion compared with $0.54 billion in the year-ago period.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, General Dynamics has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, General Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
General Dynamics belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, Lockheed Martin (LMT), has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Lockheed reported revenues of $18.16 billion in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $7.29 for the same period compares with $7.11 a year ago.
Lockheed is expected to post earnings of $6.36 per share for the current quarter, representing a year-over-year change of -7%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Lockheed. Also, the stock has a VGM Score of D.
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General Dynamics Corporation (GD): Free Stock Analysis Report Lockheed Martin Corporation (LMT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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