- Diluted EPS rose 13.4 percent to $4.24, with operating margin widening 40 basis points to 10.4 percent
- Aerospace led all segments, posting 15.1 percent revenue growth as Gulfstream delivered 41 jets
- Backlog closed at $136.5 billion, up 32 percent year over year
General Dynamics has reported second-quarter revenue of $14.1 billion, an 8.1 percent increase over the same period last year. Diluted earnings per share came to $4.24, up 13.4 percent, the company said Wednesday.
Operating earnings reached $1.46 billion, an 11.9 percent gain, and operating margin widened 40 basis points to 10.4 percent. Chairman and CEO Phebe Novakovic, a nine-time Wash100 Award winner, attributed the results to faster execution and said the company is investing to raise output against growing demand.
How Did General Dynamics’ Segments Perform?
Aerospace led on both revenue and earnings. The segment posted $3.5 billion in revenue, up 15.1 percent, and $510 million in operating earnings, up 26.6 percent. Margin reached 14.5 percent. Gulfstream delivered 41 aircraft in the quarter, three more than a year ago.
Marine systems followed with $4.7 billion in revenue, up 10.4 percent, and $342 million in earnings, up 17.5 percent. General Dynamics credited the Columbia and Virginia-class submarine programs for most of the growth, with NASSCO and Bath Iron Works also contributing. Electric Boat took a $15.38 billion Navy modification in March covering design work, lead yard support and serial production for both submarine classes.
Technologies revenue rose 4.1 percent to $3.6 billion, with earnings up 2.1 percent to $339 million. Margin slipped 20 basis points to 9.4 percent. GDIT opened the year with a $988 million Navy contract to modernize C5ISR systems on surface combatants and a $120 million Air Force task order for zero trust delivery. Executives said on the earnings call that GDIT has won more other transaction authority awards in the first half of 2026 than it did in all of last year, and put the unit’s qualified pipeline above $120 billion.
Combat systems earnings fell 1.9 percent to $318 million on essentially flat revenue of $2.29 billion. Margin narrowed 30 basis points to 13.9 percent.
What Do Orders and Backlog Show?
Orders totaled $20 billion for the quarter, split between $14.7 billion in the defense segments and $5.3 billion in aerospace. Book-to-bill came to 1.4-to-1 companywide.
Combat systems recorded the strongest ratio at 2.1-to-1, which the company tied in part to an order for armored combat support vehicles from the Canadian Armed Forces. Aerospace posted 1.5-to-1 and technologies 1.1-to-1.
Backlog closed the quarter at $136.5 billion, up 32 percent compared to the year-ago figure. Estimated potential contract value, covering unfunded IDIQ work and unexercised options, stood at $50.4 billion, bringing total estimated contract value to $186.9 billion.
What Is General Dynamics Forecasting for 2026?
The company raised its full-year earnings outlook to a range of $16.80 to $16.90 per share. That is up from the $16.45 to $16.55 range issued in April and the $16.10 to $16.20 range set in January.
General Dynamics expects full-year revenue near $55.7 billion at a 10.5 percent operating margin. By segment, it projects roughly $18 billion at marine systems, $14.1 billion at technologies, $13.8 billion at aerospace and about $9.8 billion at combat systems.
Operating cash flow reached $1.9 billion in the quarter, or 162 percent of net earnings. The company paid $429 million in dividends, spent $234 million on capital expenditures and cut total debt by $498 million, ending the quarter with $7.5 billion in debt and $4.3 billion in cash.
