General Dynamics Corporation (NYSE:GD) shares traded higher Wednesday after the company reported second-quarter 2026 results that beat analyst expectations.
Chair and CEO Phebe Novakovic said revenue grew across all four segments, including double-digit gains and margin expansion in Aerospace and Marine Systems.
She added that General Dynamics is increasing execution and investing to boost output as demand continues to grow.
Earnings And Margins
Diluted EPS of $4.24 topped the $3.96 estimate and rose 13.4% from $3.74 a year earlier, while revenue increased 8.1% to $14.094 billion, beating the $13.535 billion estimate.
Net earnings rose 14.4% to $1.16 billion. Operating earnings increased 11.9% to $1.46 billion, while operating margin expanded 40 basis points to 10.4%.
Aerospace And Marine Systems
Aerospace revenue rose 15.1% to $3.525 billion, while operating earnings climbed 26.6% to $510 million. Margin expanded to 14.5%.
Gulfstream delivered 41 aircraft, including the 100th G700. Aerospace posted a 1.5-times book-to-bill ratio, with backlog up 20%.
Marine Systems revenue increased 10.4% to $4.66 billion, while operating earnings rose 17.5% to $342 million. Margin improved to 7.3%.
Book-to-bill was 1.3 times. Awards included $2.3 billion for Virginia-class Block VI materials and $856 million for an additional John Lewis-class oiler. Backlog rose 23%.
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Combat Systems And Technologies
Combat Systems revenue was nearly flat at $2.29 billion, while operating earnings fell 1.9% to $318 million and margin narrowed to 13.9%.
Book-to-bill was 2.1 times. Major awards totaled $1.4 billion from Canada and two $850 million contracts. Backlog rose 77%.
Technologies revenue increased 4.1% to $3.619 billion, while operating earnings rose 2.1% to $339 million. Margin slipped to 9.4%, and backlog increased 26%.
Orders, Backlog And Cash Flow
General Dynamics received $20 billion in orders, including $14.7 billion across its defense businesses, for a companywide book-to-bill ratio of 1.4 times.
Total backlog rose 31.7% to $136.5 billion, while total estimated contract value reached $186.9 billion.
Operating cash flow totaled $1.88 billion, and free cash flow was $1.646 billion.
The company paid $429 million in dividends, spent $234 million on capital expenditures, and reduced debt by $498 million.
General Dynamics ended the quarter with $4.33 billion in cash, $7.52 billion in total debt and $3.18 billion in net debt.
During the earnings conference call, Novakovic said General Dynamics expects 2026 Combat Systems revenue of about $9.8 billion, with a 13.8% operating margin.
She also projected Technologies revenue of $14.1 billion and a 9.4% operating margin, according to Benzinga Pro.
GD Stock Price Activity: General Dynamics shares were up 0.05% at $393.45 at the time of publication on Wednesday, according to Benzinga Pro data.
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