General Dynamics Corp (NYSE:GD) shares are trading lower after the company reported first-quarter FY24 results.
Revenue grew 8.6% Y/Y to $10.73 billion, beating the consensus of $10.32 billion.
Revenue by segments: Aerospace $2.08 billion (+10.1% Y/Y), Marine Systems $3.33 billion (+11.3% Y/Y), Combat Systems $2.10 billion (+19.7% Y/Y) and Technologies $3.21 billion (-0.8% Y/Y).
The company ended the quarter with a $93.7 billion backlog, up 4.4% Y/Y. The consolidated book-to-bill ratio was 1 to 1 for the quarter.
In the Aerospace segment, orders in the quarter totaled $2.4 billion, growing backlog to $20.5 billion (up 6.2% Y/Y). Aerospace book-to-bill was 1.2-to-1 for the quarter.
The total estimated contract value, the sum of all backlog components, was $134 billion, up 4.4% Y/Y at the end of the quarter.
Operating earnings rose 10.4% Y/Y to $1 billion, and the margin expanded 20 basis points Y/Y to 9.7%.
EPS of $2.88 (up 9.1% Y/Y) missed the consensus of $3.03.
General Dynamics generated a negative operating cash flow of $(278) million in the quarter. Free cash outflow stood at $(437) million in the quarter.
During the quarter, the company invested $159 million in capital expenditures, paid $361 million in dividends, and used $105 million to repurchase shares, ending the quarter with $1 billion in cash and equivalents.
Phebe N. Novakovic, chairman and chief executive officer, said, "Our businesses delivered solid operating results in the quarter, growing revenue and backlog, while expanding margins, even as we awaited G700 certification."
"In the Aerospace segment, the recent FAA certification of the Gulfstream G700 has enabled us to begin customer deliveries. This is a strong start to 2024 and we remain confident in our outlook."
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Investors can gain exposure to the stock via First Trust Exchange-Traded Fund First Trust Indxx Aerospace & Defense ETF (NYSE:MISL) and Global X Funds Global X Defense Tech ETF (NYSE:SHLD).
Price Action: GD shares traded are down 5.8% at $275.64 at the last check Wednesday.