General Dynamics Corporation GD is set to release fourth-quarter 2024 results on Jan. 29, before market open.
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The company delivered a negative earnings surprise of 1.87% in the last four quarters, on average. The strong revenue performance across most of its business segments and lower interest expenses are likely to add impetus to its overall fourth-quarter results.
GD’s Aerospace Unit to Post Solid Sales
Solid revenues earned from the deliveries of Gulfstream jets, particularly G700 aircraft, as well as higher jet services backed by increased customer demand for aircraft maintenance based on established maintenance cycles, a larger installed base and customer flight activity, must have bolstered the top line of the Aerospace business segment.
The Zacks Consensus Estimate for the Aerospace segment’s revenues in the fourth quarter is pegged at $4,199.6 million. This indicates a 53% increase from revenues reported in the year-ago quarter.
GD’s Marine Systems Holds Potential
The Marine Systems unit’s revenues in the to-be-reported quarter are likely to have benefited from the increased sales volume from the construction and engineering of major programs like the Columbia-class and Virginia-class submarines.
The Zacks Consensus Estimate for the Marine segment’s revenues in the fourth quarter is pegged at $3,561.6 million. This calls for a 4.5% rise from the year-ago quarter’s reported figure.
GD’s Combat Systems Sales May Slip
Strong demand for international combat vehicles and ordinance is likely to have boosted the Combat Systems unit’s revenue performance in the fourth quarter. Solid demand for artillery products may also have contributed to this segment’s top line. However, unfavorable program timing might have some adverse impact on this unit’s overall revenue performance.
The Zacks Consensus Estimate for the Combat Systems segment’s revenues in the fourth quarter is pegged at $2,187.6 million. This suggests a drop of 7.5% from the year-ago quarter’s reported figure.
GD’s Technologies Unit to Remain Steady
Enhanced digital accelerator investments supporting GDIT's consistent growth, as well as increased IT services globally, are likely to have favored the Technologies unit’s revenues in the fourth quarter of 2024.
The Zacks Consensus Estimate for the Technologies segment’s revenues in the fourth quarter is pegged at $3,168.9 million. This suggests a rise of 0.5% from the year-ago quarter’s reported figure.
GD’s Backlog Shows Decline
Our model suggests a year-over-year decline of 3.6% for GD’s backlog in the fourth quarter of 2024. This indicates that the company might have faced some challenges in securing new contracts.
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation price-eps-surprise | General Dynamics Corporation Quote
Q4 Expectations for GD
With a majority of General Dynamics’ segments implying solid top-line growth projections, the overall revenue growth prospects of the company remain bright. The Zacks Consensus Estimate for GD’s fourth-quarter revenues is pegged at $13.06 billion, which suggests a 12% rise from the year-ago quarter.
Such a solid top-line performance projection is likely to have aided GD’s fourth-quarter bottom line. Also, lower interest expenses, backed by a lower debt balance and solid operating margins driven by improving supply-chain challenges, might have a favorable impact on the company’s overall earnings.
The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at $4.13 per share, which indicates a rise of 13.5% from the prior-year reported figure.
What the Zacks Model Unveils for GD
Our proven model does not conclusively predict an earnings beat for General Dynamics this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
GD’s Earnings ESP: GD has an Earnings ESP of -4.85%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GD’s Zacks Rank: Currently, General Dynamics carries a Zacks Rank #3.
Stocks to Consider
Below we have mentioned a few players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases:
Lockheed Martin LMT is set to report fourth-quarter earnings on Jan. 28, before market open. It has an Earnings ESP of +0.66% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LMT’s fourth-quarter earnings is pegged at $6.60 per share, while that for sales is pegged at $18.85 billion. The stock boasts a four-quarter average earnings surprise of 8.48%.
RTX Corporation RTX is expected to report its fourth-quarter 2024 results on Jan. 28, before market open. It has an Earnings ESP of +0.94% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for RTX’s fourth-quarter earnings stands at $1.37 per share, which suggests a 6.2% improvement from the fourth-quarter 2023 reported figure. The Zacks Consensus Estimate for fourth-quarter sales is pegged at $20.56 billion, which implies a 3.2% increase from that reported in the prior-year quarter.
Northrop Grumman NOC is slated to report its fourth-quarter 2024 results on Jan. 30, before market open. It has an Earnings ESP of +1.37% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NOC’s fourth-quarter earnings stands at $6.27 per share. The Zacks Consensus Estimate for fourth-quarter sales is pegged at $11.03 billion, which implies a 3.7% increase from that reported in the prior-year quarter.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
General Dynamics Corporation (GD) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
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