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FALLS CHURCH, Va. – General Dynamics (NYSE: GD) today reported third-quarter 2016 earnings from continuing operations of $767 million, a 4.6 percent increase over the year-ago quarter, on revenue of $7.7 billion. Diluted earnings per share from continuing operations were $2.48 compared to $2.28 in third-quarter 2015, an 8.8 percent increase.
Net earnings for third-quarter 2016 were $683 million, with fully diluted earnings per share of $2.21. Net earnings included an $84 million charge in discontinued operations related to the A-12 settlement reached with the U.S. Navy in 2013.
“General Dynamics had a very strong quarter, clearly demonstrated by our operating earnings, margin and return on sales,” said Phebe N. Novakovic, chairman and chief executive officer. “Our businesses are performing exceptionally well as we remain focused on operating excellence and continuous improvement.”
Company-wide operating margin for the third quarter of 2016 was 13.8 percent, a 90 basis-point increase when compared to 12.9 percent in third-quarter 2015. Three of the company's four business groups expanded margins over the year-ago period, with the Aerospace group achieving record-setting margins in the third quarter.
Net cash provided by operating activities in the quarter totaled $499 million. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $389 million.
The company repurchased 2.3 million of its outstanding shares in the third quarter. Year-to-date, the company has repurchased 11.2 million outstanding shares.
General Dynamics’ total backlog at the end of third-quarter 2016 was $62 billion. There was solid demand in the quarter across the company’s portfolio. The estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $25.2 billion. Total potential contract value, the sum of all backlog components, was $87.2 billion at the end of the quarter.
About General Dynamics
Headquartered in Falls Church, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; C4ISR and IT solutions; and shipbuilding. The company’s 2015 revenue was $31.5 billion. More information is available at www.generaldynamics.com.
Certain statements made in this press release, including any statements as to future results of operations and financial projections, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management’s expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company’s filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.
All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
WEBCAST INFORMATION: General Dynamics will webcast its third-quarter securities analyst conference call at 9 a.m. EDT on Wednesday, October 26, 2016. The webcast will be a listen-only audio event, available at www.generaldynamics.com. An on-demand replay of the webcast will be available by 12 p.m. on October 26 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 855-859-2056 (international: 404-537-3406); passcode 94369568. The phone replay will be available from 3 p.m. October 26 through November 2, 2016.