General Dynamics Beats Analyst Estimates on EPS

General Dynamics (NYSE: GD) reported earnings on July 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended July 1 (Q2), General Dynamics met expectations on revenues and beat slightly on earnings per share.

Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share expanded.

Gross margins dropped, operating margins improved, net margins shrank.

Revenue details
General Dynamics logged revenue of $7.92 billion. The 18 analysts polled by S&P Capital IQ predicted a top line of $7.92 billion on the same basis. GAAP reported sales were 0.5% higher than the prior-year quarter's $7.88 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.77. The 21 earnings estimates compiled by S&P Capital IQ predicted $1.74 per share. GAAP EPS of $1.77 for Q2 were 0.6% higher than the prior-year quarter's $1.76 per share. (The prior-year quarter included -$0.04 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 12.2%, 630 basis points worse than the prior-year quarter. Operating margin was 12.2%, 20 basis points better than the prior-year quarter. Net margin was 8.0%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $8.17 billion. On the bottom line, the average EPS estimate is $1.82.

Next year's average estimate for revenue is $32.55 billion. The average EPS estimate is $7.15.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,282 members out of 1,348 rating the stock outperform, and 66 members rating it underperform. Among 328 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 313 give General Dynamics a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on General Dynamics is outperform, with an average price target of $76.31.

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