General Dynamics (NYSE:GD) shares gained 2.26% on Friday after the aerospace and defence contractor reported third-quarter 2026 earnings and revenue above Wall Street expectations, supported by growth across all four business segments and substantial new defence contracts.
The company reported adjusted earnings per share of $4.49, exceeding analysts’ consensus estimate of $4.12. Revenue increased 12.9% year over year to $14.6 billion, ahead of expectations of $13.73 billion and up from $12.9 billion in the corresponding quarter last year.
Revenue Growth Drives Higher Profitability
Operating earnings rose 14.7% to $1.5 billion, while the operating margin improved by 20 basis points to 10.5%.
The company generated $1.7 billion in operating cash flow, equivalent to 139% of net earnings.
“Our business had exceptional third quarter results, with revenue growth across all four segments, robust bookings and solid operational performance,” said Phebe Novakovic, Chairman and Chief Executive Officer.
Defence Contracts Push Backlog to $220.3 Billion
General Dynamics secured $98.8 billion in orders during the quarter, producing a company-wide book-to-bill ratio of 6.8 to 1.
Defence segment orders totalled $93.8 billion, largely supported by major contracts for Virginia-class and Columbia-class submarines within the Marine Systems division.
The Aerospace segment recorded $5 billion in orders, representing a book-to-bill ratio of 1.4 to 1.
The company’s order backlog reached $220.3 billion at quarter-end. Including $50.4 billion in estimated potential contract value, total estimated contract value stood at $270.7 billion.
Strong Cash Generation Supports Dividends and Debt Reduction
During the quarter, General Dynamics distributed $429 million in dividends and invested $481 million in capital expenditure.
The company also reduced total debt by $500 million, reflecting its focus on maintaining financial flexibility alongside investment in future operations.
The combination of stronger-than-expected earnings, double-digit revenue growth and substantial new defence orders supported the positive share price reaction, while the expanding backlog provided greater visibility into future business activity.
General Dynamics stock price
