It has been about a month since the last earnings report for General Dynamics (GD). Shares have added about 0.2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is General Dynamics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Strong Marine Systems Performance Drives GD's Q4 Earnings and Revenues
General Dynamics reported fourth-quarter 2025 earnings per share (EPS) of $4.17, which beat the Zacks Consensus Estimate of $4.11 by 1.5%. The bottom line also increased 0.5% from $4.15 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.
For 2025, the company reported EPS of $15.45, up 13.4% from the year-ago reported figure of $13.63. The full-year bottom line also surpassed the Zacks Consensus Estimate of $15.39.
Total Revenues of GD
Revenues of $14.38 billion beat the Zacks Consensus Estimate of $13.80 billion by 4.2%. The top line also improved 7.8% from the prior-year figure of $13.34 billion.
In the fourth quarter, the Marine Systems segment remained GD’s largest revenue contributor, accounting for 33.5% of total sales.
For 2025, the company reported revenues worth $52.55 billion, up 10.1% from the year-ago reported figure of $47.72 billion. The full-year top line also beat the consensus estimate of $51.96 billion.
GD’s Segmental Performance
Aerospace: The segment reported revenues of $3.79 billion, up 1.2% year over year. Operating earnings of $481 million declined 17.8% year over year.
Marine Systems: This segment’s revenues surged 21.7% from the year-ago quarter’s level to $4.82 billion. Operating earnings of $345 million improved 72.5% year over year.
Combat Systems: The segmental top line of $2.54 billion improved 5.8% from the year-ago quarter’s level. Operating earnings improved 7% year over year to $381 million.
Technologies: Revenues from this segment declined 0.1% year over year to $3.24 billion. Operating earnings totaled $290 million, which declined 9.1% year over year.
Operational Highlights of GD
Operating earnings totaled $1.45 billion, up 2% from the year-ago quarter’s $1.42 billion.
Operating costs and expenses increased 8.5% year over year to $12.93 billion.
Interest expenses decreased 17.1% year over year to $63 million.
GD’s Backlog
General Dynamics recorded a total backlog of $178.94 billion. This includes a backlog of $118.05 billion and estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity contracts and unexercised options of $60.89 billion.
Financial Condition of GD
As of Dec. 31, 2025, cash and cash equivalents totaled $2.33 billion compared with $1.70 billion as of Dec. 31, 2024.
The long-term debt as of the same date was $7.01 billion compared with the 2024-end debt level of $7.26 billion.
During 2025, cash generated by operating activities totaled $5.12 billion compared with $4.11 billion in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, General Dynamics has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
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
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, GE Aerospace (GE), has gained 14.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.
GE reported revenues of $11.87 billion in the last reported quarter, representing a year-over-year change of +20.1%. EPS of $1.57 for the same period compares with $1.32 a year ago.
GE is expected to post earnings of $1.63 per share for the current quarter, representing a year-over-year change of +9.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.
GE has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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General Dynamics Corporation (GD): Free Stock Analysis Report GE Aerospace (GE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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