General Dynamics’ second-quarter profit and revenue exceeded analyst estimates on Wednesday, driven by strong orders in its marine segment from Columbia- and Virginia-class submarine programs, lifting shares by five percent in early trading.
The defense company’s nuclear-powered submarine-building marine systems segment saw a 22.2 percent increase in revenue. The unit is now projected to generate 2025 revenue of $15.6 billion with a seven percent margin.
During the quarter, the Pentagon modified a submarine production contract awarded to the company’s marine segment, increasing its value by $1.85 billion. The company also reached a new agreement with union members at its submarine manufacturing unit, avoiding a skilled labor shortage that has contributed to delays in U.S. Navy shipbuilding schedules.
The technologies segment, which produces products for military, intelligence, federal civilian, and state customers, reported a 5.5 percent year-on-year revenue increase.
Defense manufacturers benefited from strong demand for weapons and military equipment during the quarter, fueled by geopolitical uncertainty and ongoing conflicts in the Middle East.
New bookings during the quarter were 2.4 times the billing for General Dynamics’ defense segments, reflecting a robust order backlog.
However, revenue in the combat systems division, which produces land combat vehicles, weapons systems, and munitions, dipped 0.2 percent due to the Pentagon’s cancellation of the M10 Booker contract and production delays caused by supply chain issues.
Annual revenue for the combat segment is forecast at $9.2 billion with a 14.5 percent margin.
The Reston, Virginia-based company reported quarterly adjusted earnings of $3.74 per share, surpassing analysts’ estimates of $3.53 per share, according to LSEG data.
It expects full-year earnings to range between $15.05 and $15.15 per share.
General Dynamics’ total quarterly revenue of $1.3 billion exceeded Wall Street analysts’ estimate of $1.23 billion.
Total revenue for fiscal year 2025 is projected at $51.2 billion, with a 10.3 percent operating margin.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Leroy Leo, Paul Simao, Rod Nickel)
