General Dynamics(US:GD)2025-07-23 11:53Financial Highlights General Dynamics reported strong second-quarter 2025 results, with significant year-over-year growth in revenue, operating earnings, and diluted EPS, achieving an operating margin of 10.0%, a 30-basis-point expansion from the prior year's quarter, alongside strong order activity in Marine and Aerospace segments Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $13.0 billion | +8.9% | | Operating Earnings | $1.3 billion | +12.9% | | Diluted EPS | $3.74 | +14.7% | | Operating Margin | 10.0% | +30 bps | - For the first half of 2025, all four business segments achieved growth in both revenue and earnings, with the company-wide operating margin expanding by 50 basis points compared to the same period in 20242 - Net cash provided by operating activities in Q2 2025 totaled $1.6 billion, which is 158% of net earnings24 Capital Deployment and Financial Position In Q2 2025, the company deployed capital by paying $402 million in dividends, investing $198 million in capital expenditures, and significantly reducing total debt by $897 million, ending the quarter with $8.7 billion in total debt and $1.5 billion in cash and equivalents Q2 2025 Capital Deployment | Activity | Amount | | :--- | :--- | | Dividends Paid | $402 million | | Capital Expenditures | $198 million | | Debt Reduction | $897 million | Financial Position at End of Q2 2025 | Metric | Amount | | :--- | :--- | | Total Debt | $8.7 billion | | Cash and Equivalents | $1.5 billion | Orders and Backlog The company reported a strong consolidated book-to-bill ratio of 2.2-to-1 for the quarter, driven by a 2.4-to-1 ratio in defense segments and 1.3-to-1 in aerospace, with total backlog growing to $103.7 billion and total estimated contract value reaching $161.2 billion Q2 2025 Book-to-Bill Ratio | Segment | Book-to-Bill Ratio | | :--- | :--- | | Consolidated | 2.2-to-1 | | Defense Segments | 2.4-to-1 | | Aerospace Segment | 1.3-to-1 | Backlog and Contract Value (End of Q2 2025) | Metric | Amount | | :--- | :--- | | Total Orders (Q2) | $28.3 billion | | Total Backlog | $103.7 billion | | Estimated Potential Contract Value | $57.5 billion | | Total Estimated Contract Value | $161.2 billion | Segment Performance In Q2 2025, Marine Systems led revenue growth with a 22.2% increase year-over-year, while Aerospace showed the strongest operating earnings growth at 26.3% and a significant margin expansion to 13.2%, with Aerospace being the standout performer for the first half of the year with 21.2% revenue growth and 45.5% operating earnings growth Q2 2025 Revenue by Segment (YoY) | Segment | Revenue (in millions) | YoY Change | | :--- | :--- | :--- | | Aerospace | $3,062 | +4.1% | | Marine Systems | $4,220 | +22.2% | | Combat Systems | $2,283 | -0.2% | | Technologies | $3,476 | +5.5% | | Total | $13,041 | +8.9% | Q2 2025 Operating Earnings & Margin by Segment | Segment | Operating Earnings (in millions) | YoY Change | Operating Margin | | :--- | :--- | :--- | :--- | | Aerospace | $403 | +26.3% | 13.2% | | Marine Systems | $291 | +18.8% | 6.9% | | Combat Systems | $324 | +3.5% | 14.2% | | Technologies | $332 | +3.8% | 9.6% | Six Months 2025 Revenue & Operating Earnings by Segment (YoY) | Segment | Revenue (in millions) | Revenue YoY Change | Operating Earnings (in millions) | Earnings YoY Change | | :--- | :--- | :--- | :--- | :--- | | Aerospace | $6,088 | +21.2% | $835 | +45.5% | | Marine Systems | $7,809 | +15.1% | $541 | +13.4% | | Combat Systems | $4,459 | +1.6% | $615 | +3.4% | | Technologies | $6,908 | +6.1% | $660 | +7.3% | Consolidated Financial Statements The consolidated financial statements detail the company's performance for the three and six months ended June 29, 2025, including the statement of earnings, balance sheet, and statement of cash flows, providing a comprehensive view of financial health and operational results Consolidated Statement of Earnings For Q2 2025, net earnings increased 12.0% to $1.014 billion, with diluted EPS rising 14.7% to $3.74, while for the first six months, net earnings grew 17.8% to $2.008 billion, and diluted EPS increased 20.5% to $7.40, reflecting strong top-line growth and improved profitability Q2 2025 Statement of Earnings Highlights (in millions, except per share) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $13,041 | $11,976 | +8.9% | | Operating Earnings | $1,305 | $1,156 | +12.9% | | Net Earnings | $1,014 | $905 | +12.0% | | Diluted EPS | $3.74 | $3.26 | +14.7% | Six Months 2025 Statement of Earnings Highlights (in millions, except per share) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $25,264 | $22,707 | +11.3% | | Operating Earnings | $2,573 | $2,192 | +17.4% | | Net Earnings | $2,008 | $1,704 | +17.8% | | Diluted EPS | $7.40 | $6.14 | +20.5% | Consolidated Balance Sheet As of June 29, 2025, total assets stood at $56.9 billion, a slight increase from year-end 2024, with total shareholders' equity growing to $23.6 billion from $22.1 billion, driven by retained earnings, and total debt remaining relatively stable at $8.7 billion Balance Sheet Summary (in millions) | Account | June 29, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $1,523 | $1,697 | | Total current assets | $25,066 | $24,386 | | Total assets | $56,888 | $55,880 | | Total current liabilities | $18,379 | $17,824 | | Long-term debt | $7,508 | $7,260 | | Total shareholders' equity | $23,580 | $22,063 | Consolidated Statement of Cash Flows For the first six months of 2025, net cash provided by operating activities was $1.45 billion, a significant improvement from $536 million in the prior-year period, while net cash used in financing activities was $1.4 billion, primarily due to debt repayment, dividends, and stock repurchases Six Months 2025 Cash Flow Summary (in millions) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,450 | $536 | | Net Cash used by Investing Activities | ($216) | ($307) | | Net Cash used by Financing Activities | ($1,403) | ($778) | | Net Decrease in Cash | ($174) | ($551) | Supplemental Data Supplemental data provides additional financial metrics and non-GAAP measures, including a significant increase in free cash flow for both the quarter and six-month period, with Aerospace segment details showing an increase in aircraft deliveries and a strong book-to-bill ratio of 1.3x for the quarter Additional Financial Information The company's financial health improved, with the debt-to-equity ratio decreasing to 36.9% from 39.7% at year-end 2024, and free cash flow, a non-GAAP measure, showed substantial growth, reaching $1.4 billion in Q2 2025 compared to $613 million in Q2 2024 Key Financial Ratios | Metric | June 29, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Debt-to-equity | 36.9% | 39.7% | | Book value per share | $87.66 | $81.61 | Free Cash Flow (Non-GAAP, in millions) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Second Quarter | $1,400 | $613 | | Six Months | $1,110 | $176 | Aerospace Supplemental Data The Aerospace segment delivered 38 aircraft in Q2 2025, up from 37 in the prior-year quarter, with deliveries increasing to 74 units from 61 for the first six months, and the segment's book-to-bill ratio was strong at 1.3x for the quarter, indicating robust demand Gulfstream Aircraft Deliveries (units) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Second Quarter | 38 | 37 | | Six Months | 74 | 61 | Aerospace Book-to-Bill Ratio | Period | 2025 | 2024 | | :--- | :--- | :--- | | Second Quarter | 1.3x | 0.9x | | Six Months | 1.0x | 1.0x |