A month has gone by since the last earnings report for General Dynamics (GD). Shares have lost about 2.1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is General Dynamics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

General Dynamics' Q4 Earnings Beat Estimates, Revenues Rise Y/Y

General Dynamics Corporation reported fourth-quarter 2024 earnings per share (EPS) of $4.15, which beat the Zacks Consensus Estimate of $4.13 by 0.5%. The bottom line also increased 14% from $3.64 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 2024, the company reported EPS of $13.63, up 13.4% from the year-ago reported figure of $12.02. The full-year bottom line, however, missed the Zacks Consensus Estimate of $13.66.

Total Revenues of GD

Revenues of $13.34 billion beat the Zacks Consensus Estimate of $13.06 billion by 2.1%. The top line also improved 14.3% from the prior-year figure.

The year-over-year improvement can be attributed to increased revenues from each of GD’s four business segments.

For 2024, the company reported revenues worth $47.72 billion, up 12.9% from the year-ago reported figure of $42.27 billion. The full-year top line also beat the Zacks Consensus Estimate of $47.44 billion.

GD’s Segmental Performance

Aerospace: The segment reported revenues of $3.74 billion, up 36.4% year over year. Operating earnings of $585 million improved 30.3% year over year.

Marine Systems: This segment’s revenues rose 16.2% to $3.96 billion from the year-ago quarter’s level. Operating earnings of $200 million declined 7.8% year over year.

Technologies: The segment’s revenues improved 2.8% year over year to $3.24 billion. Operating earnings totaled $319 million, which improved 4.6% year over year.

Combat Systems: The segment’s revenues of $2.40 billion were up 1.3% from the year-ago quarter’s level. However, operating earnings improved 1.4% year over year to $356 million.

Operational Highlights of GD

Operating earnings totaled $1.42 billion, up 10.5% from the year-ago quarter’s $1.06 billion.

Operating costs and expenses increased 14.8% year over year to $11.92 billion.

Interest expenses declined 2.6% year over year to $76 million.

GD’s Backlog

General Dynamics recorded a total backlog of $90.60 billion, lower than the third-quarter level of $92.63 billion. The funded backlog at the end of the quarter was $75.14 billion.

Our model projected a backlog of $90.28 billion for the fourth quarter.

Financial Condition of GD

As of Dec. 31, 2024, cash and cash equivalents totaled $1.69 billion compared with $1.91 billion as of Dec. 31, 2023.

The long-term debt as of the same date was $7.26 billion, down from the 2023-end level of $8.75 billion.

During 2024, cash flow from operating activities totaled $4.11 billion compared with $4.71 billion in the year-ago period.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, General Dynamics has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, 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 #4 (Sell). We expect a below average 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, RTX (RTX), has gained 1.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2024.

RTX reported revenues of $21.62 billion in the last reported quarter, representing a year-over-year change of +8.5%. EPS of $1.54 for the same period compares with $1.29 a year ago.

For the current quarter, RTX is expected to post earnings of $1.34 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for RTX. Also, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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