EarningsQ3 2026 Earnings Report
MX:GD Q3 2026 EPS Results
Actual EPS$84.35
Consensus EPS$77.50
Beat/MissBeat by +$6.86
One Year Ago EPS$72.89
MX:GD Q3 2026 Revenue Results
Actual Revenue$273.65B
Expected Revenue$257.72B
Beat/MissBeat by +$15.92B
YoY Revenue Growth+12.85%
Earnings Announcement Details
QuarterQ3 2026
Date10/30/2026
TimeBefore Open
Conference CallFriday, October 30, 2026
MX:GD Upcoming Earnings
General Dynamics's next earnings date is estimated for January 27, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
MX:GD Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive. General Dynamics reported double-digit company-wide revenue, operating earnings, net earnings, and EPS growth; record orders and backlog; exceptional cash generation; strong Aerospace and Marine performance; and another increase to full-year EPS guidance. The main challenges were margin pressure in Combat and Technologies, expected fourth-quarter Technologies softness, Middle East order caution, a temporary G280-to-G300 delivery gap, and the possibility that Marine growth will moderate from its recent pace. Highlights significantly outweighed lowlights.Company Guidance
Strong Third-Quarter Financial Performance
Revenue was $14.57 billion, up 12.9% from the year-ago quarter. Operating earnings increased 14.7% to $1.527 billion, net earnings increased 16.1% to $1.229 billion, and diluted EPS rose $0.61, or 15.7%, to $4.49. Company-wide operating margin improved 20 basis points to 10.5%.
Sequential and Year-to-Date Growth
Compared with the second quarter, revenue increased 3.3%, operating earnings increased 4.6%, and diluted EPS increased approximately 6%. For the first nine months, revenue was up 10.4%, operating earnings were up 12.9%, and EPS was up 13.6%, helped by a 30-basis-point improvement in operating margin.
Earnings Beat Consensus
The company exceeded consensus estimates by $0.37 per diluted share, with more revenue and operating earnings than anticipated by the sell side.
Record Orders and Backlog
Nearly $99 billion in new orders during the quarter drove backlog to a record $220 billion, doubling the level of a year ago. Total estimated contract value, including options and IDIQ contracts, ended the quarter at $271 billion.
Major Marine Systems Awards
Electric Boat received significant awards, including $29.5 billion for five additional Columbia-class submarines in Build 2 and $42.1 billion for nine additional Virginia-class submarines in Block VI.
Strong Book-to-Bill Across Businesses
Defense book-to-bill was 8.5x, Technologies book-to-bill was 1.4x for the quarter and 1.3x year-to-date, Aerospace book-to-bill was 1.4x, and Combat Systems book-to-bill was just shy of 1:1 following a very strong second quarter.
Exceptional Cash Generation
Operating cash flow was $1.7 billion in the quarter and more than $5.7 billion during the first nine months. Free cash flow was $1.2 billion in the quarter, representing a 100% cash conversion rate, and $4.8 billion year-to-date, representing 137% of net earnings. The company expects approximately 105% free-cash-flow conversion for the full year, with potential upside depending on fourth-quarter capital-project timing.
Working Capital and Pension Improvements
Operating working capital declined nearly $1.7 billion from the end of 2025 despite revenue growth of more than 10%. The company contributed $500 million to its pension plans, leaving its frozen plans essentially funded and positioning the company to derisk the plans and control pension costs flowing to contracts.
Stronger Balance Sheet and Lower Interest Expense
The company ended the quarter with approximately $4.4 billion of cash and $2.6 billion of net debt, a $3 billion improvement from year-end. Net interest expense declined to $45 million from $74 million in the year-ago quarter and was $163 million for the first nine months versus $251 million in the comparable 2025 period. The company had not used the commercial paper market during 2026.
Aerospace Revenue and Margin Growth
Aerospace revenue was $3.54 billion, up 9.3% year over year, while operating earnings were $513 million and operating margin was 14.5%. Operating earnings increased $83 million, driven in part by higher revenue and a 120-basis-point improvement in operating margin.
Gulfstream Delivery and Manufacturing Progress
Gulfstream delivered 40 aircraft, one more than in the year-ago quarter, with a slightly more favorable mix. The company reported efficiency gains in manufacturing and completions, particularly on the G700 and G800, and had delivered its 33rd G800 aircraft. Gulfstream expects to deliver 200 aircraft in 2030 and stated that it has the production, workforce, and facilities to produce 200 aircraft.
Aerospace Services and Demand Strength
Aircraft services revenue increased at both Gulfstream and Jet Aviation, with volume increases at Gulfstream MRO centers and particularly robust activity at U.S. FBOs. New aircraft orders in the first nine months of 2026 were up more than 30% from the prior year, with active interest across the entire Gulfstream product line.
Combat Demand and International Growth
Combat Systems revenue was $2.39 billion, up 6% year over year, and increased 4.2% sequentially while earnings increased 3.8% sequentially. Demand was described as strong, primarily driven by U.S. allies. European Land Systems revenue increased 28% year over year, demand remained strong for the Piranha and Eagle vehicle families, and Ordnance and Tactical Systems reported solid growth in medium- and large-caliber munitions and propellants.
Marine Systems Revenue, Earnings, and Productivity Gains
Marine Systems revenue increased 21% year over year, driven by Columbia- and Virginia-class construction volumes, followed by DDG 51 and T-AO volumes. Earnings increased 34.4% with an 80-basis-point margin improvement. All shipyards experienced increased throughput, and the company reported measurable productivity gains at Electric Boat, including significantly increased earned hours.
Marine Production Milestones and Investment
The last Block IV Virginia-class submarine is expected to be delivered in the next several months, after which Electric Boat will have delivered five Virginia-class submarines in five years. All 12 Block V Virginia ships and all Columbia Build 1 ships are in various stages of construction. The company remains focused on delivering the first Columbia and first Virginia VPM ships by the end of 2028 and is continuing to invest in shipyard capacity, productivity, automation, workforce development, and training.
Technologies Growth and Record Mission Systems Orders
Technologies revenue was $3.7 billion, up 10.8% year over year, while operating earnings increased 5.8% to $346 million. Year-to-date revenue increased 6.3% and earnings increased 3.7%. Mission Systems orders were the highest ever for a single quarter, and its first-nine-month orders exceeded any full year in the group's history.
Raised 2026 Guidance
The company raised its 2026 diluted EPS forecast to $17.20-$17.30, compared with the initial January range of $16.10-$16.20 and nearly 7% higher than anticipated at the beginning of the year. Revenue guidance is $56.5 billion-$56.8 billion, with operating margin around 10.5%.
Continued Capital Investment for Growth
Capital expenditures were $481 million in the quarter and 2.2% of sales for the first nine months. The company continues to expect capital expenditures of 3.5%-4% of sales for the full year and expects a significant fourth-quarter increase, particularly to accelerate shipyard production and meet future demand. Capital expenditures are expected to remain elevated in 2027.
Capital Returns and Ongoing Product Investment
The company paid approximately $430 million in dividends and repurchased about $285 million of common stock to cover estimated dilution. Management said it will continue investing in defense businesses and Gulfstream products where it expects a strong return and can meet customer needs, while remaining cautious regarding acquisitions.
Munitions and Missile-Capability Milestones
Ordnance and Tactical Systems is supporting missile primes, including through motor cases and actuators, while Mission Systems supplies guidance-system components. The Mesquite solid-rocket-motor facility is progressing as planned and is expected to be qualified and producing in 2028. The company expects to produce artillery test rounds next year and enter production in early 2028.
Submarine Supply-Chain Capacity Expansion
The company welcomed new entrants into the submarine industrial base and is focused on obtaining additional capacity for torpedo tubes, air flasks, impulse tanks, and auxiliary tanks. Columbia and Virginia output and throughput were up 30% year over year, and Electric Boat had added 6,000 new shipbuilders, with plans to reach 8,000 by year-end.
MX:GD Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed