General Dynamics (GD) Benefits From Budgetary Amendments

Zacks Equity Research


General Dynamics (GD) is expected to gain from a robust product line along with recent buyouts.

Recently, we issued an updated research report on General Dynamics Corporation GD. The company reported second-quarter 2018 adjusted earnings of $2.82 per share, which surpassed the Zacks Consensus Estimate of $2.49 by 13.3%. Moreover, total revenues of $9,186 million surpassed the Zacks Consensus Estimate of $9,108 million by 0.9%.Solid performance in the combat systems, information systems and technology, marine systems as well as mission systems segments drove quarterly results.Whats Driving General Dynamics?General Dynamics is one of the only two contractors in the world equipped to build nuclear-powered submarines and one of the prime U.S. shipbuilders. An optimistic budgetary amendment tends to improve the profit margin of defense majors like General Dynamics. To this end, it is imperative to mention the fiscal 2019 defense budget, which got the U.S. Senates nod last month. Notably, this budget includes a spending provision of $194.1 billion for the U.S. Navy. In particular, it incorporates $58.5-billion procurement for purchasing 10 ships, including two submarines and 54 ships across the Future Years Defense Plan (FYDP).The company boasts a robust pipeline in Europe and the Middle East. Moreover, Asia-Pacific has recently emerged as a region with higher demand for defense equipments, which offers enhanced expansion option for defense contractors.Whil....

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