GD Q3 Earnings Coming Up: Will Lower Interest Expenses Aid the Stock?

General Dynamics Corporation GD is set to release third-quarter 2024 results on Oct. 23 before market open.

See the Zacks Earnings Calendar to stay ahead of market-making news.  

The company delivered an earnings surprise of 0.95% 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 third-quarter results.

GD’s Aerospace Unit to Post Solid Sales
 

Solid revenues earned from the deliveries of new Gulfstream jets, particularly G700 aircraft, must have bolstered the top line of the Aerospace business segment.

Robust aircraft services revenues, driven by increased customer demand for aircraft maintenance due to higher flight activity as a result of growing commercial air traffic, can also be projected to have boosted the Aerospace unit’s top line.

The Zacks Consensus Estimate for the Aerospace segment’s revenues in the third quarter is pegged at $3,055.1 million. This indicates a 50.3% 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 third quarter is pegged at $3,438.5 million. This calls for a 14.5% rise from the year-ago quarter’s reported figure.

GD’s Combat Systems Sales May Rise
 

Increases in sales volumes for GD’s wheeled combat vehicles, particularly Abrams and Booker battle tanks, are likely to have boosted the Combat Systems unit’s revenue performance in the third quarter. Facilities expansion and increased weapons systems and munitions sales, backed by solid demand for artillery products, may have contributed to this segment’s top line.

GD’s Technologies Unit to Remain Steady
 

Strong demand for IT services boosting steady growth at GDIT, as well as the benefits of the transition from legacy programs to new programs in the mission systems business, is likely to have favored the Technologies unit’s revenues in the third quarter of 2024.

The Zacks Consensus Estimate for the Technologies segment’s revenues in the third quarter is pegged at $3,335.6 million. This suggests a rise of 0.7% from the year-ago quarter’s reported figure.

GD’s Backlog Shows Decline
 

Our model suggests a year-over-year decline of 2.6% for GD’s backlog in the third quarter of 2024. This indicates that the company might be facing some challenges in securing new contracts.

Q3 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 third-quarter revenues is pegged at $11.91 billion, which suggests a 12.7% rise from the year-ago quarter.

Such a solid top-line performance projection is likely to have aided GD’s third-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 third-quarter earnings is pegged at $3.61 per share, which indicates a rise of 18.8% 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 -7.57%. 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 the following 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 third-quarter earnings on Oct. 22 before market open. It has an Earnings ESP of +1.29% 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 third-quarter earnings is pegged at $6.47 per share. The Zacks Consensus Estimate for third-quarter sales is pegged at $17.28 billion, which implies a 2.4% increase from that reported in the prior-year quarter.

Northrop Grumman NOC is slated to report its third-quarter 2024 results on Oct. 24 before market open. It has an Earnings ESP of +1.12% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for NOC’s third-quarter earnings stands at $6.06 per share. The Zacks Consensus Estimate for third-quarter sales is pegged at $10.23 billion, which implies a 4.7% increase from that reported in the prior-year quarter.

L3Harris Technologies, Inc. LHX is expected to report its third-quarter 2024 results on Oct. 24 after market close. It has an Earnings ESP of +1.31% and carries a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for LHX’s third-quarter earnings stands at $3.28 per share, which suggests a 2.8% improvement from the third-quarter 2023 reported figure. The Zacks Consensus Estimate for third-quarter sales is pegged at $5.30 billion, which implies a 7.9% 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
 
L3Harris Technologies Inc (LHX): Free Stock Analysis Report

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