GD

General Dynamics (GD) reported second quarter 2026 earnings of $4.24 per share, surpassing estimates, with revenue growth across all four segments and a reported backlog of $136.5b plus $50.4b in potential contract value. General Dynamics shares are trading at $379.32. Short term share price momentum has been slightly softer over the past week, while the 90 day share price return of 9.37% and 1 year total shareholder return of 18.93% point to underlying positive sentiment around recent contract wins and the earnings beat. Compare General Dynamics' earnings beat and contract backlog with other defense and infrastructure contractors by screening for list of solid balance sheet and fundamentals (51 results) that may be positioned for the next phase of orders. General Dynamics has delivered solid earnings and carries a large backlog. However, the recent share price has cooled slightly after a strong 90 day run. How much of the move still appears tied to fundamentals versus sentiment as valuation comes into focus? The most followed narrative currently places General Dynamics' fair value at $414.17 against the latest close of $379.32, framing the Q2 beat within a longer term earnings and backlog story. Read the complete narrative. Read the complete narrative. Want to see what is behind that fair value gap? The narrative leans on steady revenue expansion, firmer margins, and a richer earnings base over time. The real interest is how these forecasts connect to the required return and the profit multiple baked into that $414.17 figure. Analysts feeding into this narrative are working off moderate revenue growth assumptions, slightly higher profit margins, and a required return of 7.87% rather than aggressive, high risk projections. That combination supports a valuation framework where future earnings are discounted back, then compared with today’s $379.32 price to judge how much of the order book and margin profile is already reflected. Result: Fair Value of $414.17 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, General Dynamics' narrative still depends on Marine and Aerospace execution, where supply chain setbacks or softer Gulfstream service demand could quickly challenge today’s fair value assumptions. Find out about the key risks to this General Dynamics narrative. The story so far around General Dynamics leans positive, so it makes sense to look at the data yourself and move quickly. To see why some investors are optimistic, review the 5 key rewards If you are serious about building a stronger portfolio, do not stop at General Dynamics. Use the Simply Wall St Screener to compare other opportunities side by side. Spot potential value opportunities early by checking companies that show up in the 44 high quality undervalued stocks. Strengthen your income stream by reviewing the 12 dividend fortresses that could support more reliable cash returns. Sleep easier by focusing on resilience through the 74 resilient stocks with low risk scores that score well on stability factors. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GD. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

It has been about a month since the last earnings report for General Dynamics (GD). Shares have lost about 0.6% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is General Dynamics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers. General Dynamics' Q2 Earnings Surpass Estimates, Revenues Improve Y/Y General Dynamics Corporation reported second-quarter 2026 earnings of $4.24 per share, beating the Zacks Consensus Estimate of $3.95 by 7.3%. The bottom line increased 13.4% from $3.74 in the year-ago quarter, reflecting higher operating earnings and lower net interest expense. Revenues of $14.09 billion surpassed the consensus mark of $13.49 billion by 4.5% and rose 8.1% year over year. Growth across all four segments, led by Aerospace and Marine Systems, supported the top line. Aerospace revenues increased 15.1% year over year to $3.53 billion. Operating earnings surged 26.6% to $510 million. The operating margin expanded 130 basis points to 14.5%. Marine Systems revenues advanced 10.4% to $4.66 billion. Operating earnings increased 17.5% to $342 million. The segment’s operating margin improved 40 basis points to 7.3%. Combat Systems revenues were $2.29 billion, up 0.3% from the prior-year quarter. However, operating earnings declined 1.9% to $318 million, while the operating margin contracted 30 basis points to 13.9%. Technologies revenues increased 4.1% year over year to $3.62 billion. Operating earnings improved 2.1% to $339 million. The operating margin declined 20 basis points to 9.4%. Operating earnings totaled $1.46 billion, up 11.9% from the year-ago quarter’s $1.31 billion. Operating costs and expenses increased 7.7% year over year to $12.63 billion. Interest expenses decreased 44.3% year over year to $49 million. General Dynamics ended the quarter with a backlog of $136.5 billion. In addition, its estimated potential contract value from unfunded IDIQ contracts and unexercised options was $50.4 billion, bringing its total estimated contract value to $186.9 billion. As of July 5, 2026, cash and cash equivalents totaled $4.33 billion compared with $2.33 billion as of Dec. 31, 2025. The long-term debt as of the same date was $6.26 billion compared with the 2025-end debt level of $7.01 billion. During the first six months of 2026, cash generated by operating activities totaled $4.04 billion compared with $1.45 billion in the year-ago period. Since the earnings release, investors have witnessed a upward trend in estimates revision. Currently, General Dynamics has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the top 40% for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, General Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. General Dynamics belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, Northrop Grumman (NOC), has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Northrop Grumman reported revenues of $10.88 billion in the last reported quarter, representing a year-over-year change of +5.1%. EPS of $7.68 for the same period compares with $7.11 a year ago. Northrop Grumman is expected to post earnings of $7.26 per share for the current quarter, representing a year-over-year change of -5.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. Northrop Grumman has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD) : Free Stock Analysis Report Northrop Grumman Corporation (NOC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Palantir Technologies (NASDAQ: PLTR) saw its stock soar this month after reporting another strong earnings result. It now has a market cap larger than every defense contractor in the world. However, because of its high price-to-earnings ratio (P/E) and price-to-sales ratio (P/S), investors would be smart to avoid buying Palantir stock after shares have soared hundreds of percentage points in the past few years. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Instead, someone looking to bet on growth in U.S. defense spending should consider these two legacy providers. Here's why Lockheed Martin (NYSE: LMT) and General Dynamics (NYSE: GD) are solid buys with the market near all-time highs. Lockheed Martin is a defense contractor specializing in fighter jets and missile systems, with its F-35 line serving as the current workhorse fighter jet for the United States and its allies. The F-35 program has long lead times and maintenance requirements, which will lead to durable recurring revenue for the business over the coming decades. Second, Lockheed Martin is the maker of THAAD missile interceptors, which have been used extensively in the conflict with Iran, so much so that the United States just awarded Lockheed Martin a $35 billion contract to quadruple the production rate of these interceptors. This is the main reason the company's backlog hit a record $230 billion at the end of last quarter. This backlog is being converted into revenue quickly, with management upgrading its full-year guidance to over $80 billion and boosting free cash flow to over $7 billion. With the growing need for Lockheed Martin's programs and the steady demand for the F-35, the company should see consistent sales growth in the years ahead. Another company with steady, long-term contracts with the United States is General Dynamics. It's the main contractor for building nuclear-powered and nuclear-armed submarines, which are a priority program for the U.S. Navy. The new Columbia-class submarines will be built over the next two decades, will have a service life that extends into most of this century, and will cost almost $10 billion each to build. This will provide General Dynamics with high-quality revenue for years to come. Outside of nuclear submarines, General Dynamics operates Gulfstream, a leading private aviation company, and has many contracts for software, cybersecurity, and other IT services for the United States government. Combined, General Dynamics saw its backlog rise to $136.5 billion last quarter, with a book-to-bill ratio of 1.4. This means that for every dollar General Dynamics billed for under contracts, it was able to book $1.40 in new contract value. Revenue grew 8% year over year last quarter, and full-year revenue guidance was just raised to $55.7 billion. With these nuclear submarine contracts, General Dynamics should be delivering solid growth for shareholders for years to come, with high predictability. When debating which stock to add to your portfolio, you might argue that Palantir is a better buy because of its rapid revenue growth. However, with a P/E ratio of 150, a lot of future growth is already priced into the stock. On the other hand, General Dynamics and Lockheed Martin trade at P/E ratios of 24 and 22, respectively, with steady, long-term contracts. Both companies return capital to shareholders through share buybacks, reducing shares outstanding and increasing earnings per share (EPS), while Palantir's shares outstanding have risen 20% in the last five years. Plus, both of these legacy providers pay a nice dividend as a cherry on top. Combine it all together, and General Dynamics and Lockheed Martin should deliver better returns at lower risk than owning Palantir over the next decade. Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy. Palantir Just Crushed Earnings Again. These 2 Legacy Defense Stocks Are the Cheaper Way to Play the Same Budget. was originally published by The Motley Fool

This article first appeared on GuruFocus. Release Date: August 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue in Q2 2026 was $14.7 million, exceeding guidance and up 146% year-over-year, driven by EPFD program and charger deliveries. Backlog reached 1,001 aircraft valued at $3.9 billion, nearly hitting the $4 billion year-end target by mid-year. Achieved significant certification milestones, including resolving FAA policy issues for the H500A motor and completing the CX-300 requirements definition phase. Launched EIPP operations with United Therapeutics, becoming the first company to do so, and expanded charging network to 138 sites with the ACES consortium targeting 250 more. Expanded defense and component sales, including the MV-250 unveiling, flight control computer sales to Horizon, and growing partnerships with GE Aerospace and General Dynamics. Adjusted EBITDA remained deeply negative at -$110 million in Q2, with full-year guidance widened to -$400 million to -$445 million. Operating expenses were high at $166 million, reflecting continued heavy R&D and G&A spending. Max demonstrated production rate remained unchanged, indicating a deliberate but slow ramp-up in manufacturing. The company faces execution risks in certification, with remaining tests and FAA approvals still pending for the H500A and CX-300. Cash burn is significant, though the planned $1 billion EXIM financing is intended to extend runway, but it is not yet finalized. Warning! GuruFocus has detected 2 Warning Sign with BETA. Is BETA fairly valued? Test your thesis with our free DCF calculator. Q: Given the significant progress on the H500A motor and the CX-300 requirements definition phase, could the certification of these two programs end up being closer together than previously expected, or is there a dependency that creates a lag?A: Kyle Clark, Founder and CEO: The intentional year split between the H500A and CX300 is not necessary, and they can be concurrently certified. The H500A's policy interpretation issues did not affect the CX300 program. We are in a strong position to move through TIA and flight testing, and the H500A could be concurrently certified if needed. The FAA's acceptance of our detailed design standards collector for the CX-300, a first in the AAM industry, resolves policy issues upfront, allowing us to move quickly. Q: What applications and use cases will you target for the MV-250 military aircraft, how quickly can it be deployed, and what is the expected selling price?A: Kyle Clark, Founder and CEO: The MV-250 is a multi-mission platform focused first on contested logistics, carrying a 2,000-pound payload over a 250 nautical mile tactical range. It can also be used for CASEVAC, Medevac, and launched effects, with a 13-hour loiter time. Its speed, range, and autonomous capabilities allow it to operate in riskier areas without a pilot. The aircraft has a low logistics tail, requiring about 1/10 of the crew of a legacy rotorcraft. We are targeting a rapid prototyping contract with the Army within the next year. Q: What is the most significant aspect of the joint charger announcement with Archer, and how do you expect the charging segment to grow, especially with EIPP now started?A: Kyle Clark, Founder and CEO: The partnership is about coalescing around a common standard and strategically deploying chargers. Archer brings unique insight into high-value metropolitan endpoints, while Beta provides the hardware and insight into cargo and medical routes. This creates a more powerful network. Herman Cuto, CFO, added that the consortium will grow as Beta has the only certified CCS charger suitable for electric aviation, and the immediate focus is identifying strategic locations and timelines. Q: Can you provide an update on the H500A engine certification, specifically what is left in phase four over the next 6 to 12 months?A: Kyle Clark, Founder and CEO: We are in pure execution mode. We have completed a large number of tests, including lightning and durability testing with associated teardowns overseen by the FAA. What remains are mechanical tests, dual-160 tests, and longer-term tests. We have over 80,000 hours of runtime on our motors, which is far more than typical turbine engines. The remaining work is repeating tests in front of the FAA, getting sign-off on methods, and ultimately receiving the type certificate. Q: How should we think about the completion of the CX-300 phase four, and what are the nuances of the testing process?A: Kyle Clark, Founder and CEO: The CX-300 certification is a well-known process. The three new technologiespropulsion, batteries, and fly-by-wirehave had their risks retired. The fly-by-wire system is enveloped by Part 25 standards, and battery issue papers are accepted. We have already flown with FAA test pilots to get early feedback on human factors. The remaining work involves conforming article structural tests, durability tests, and flying qualities tests. We have 80% commonality with the VTOL aircraft, and we adopt higher standards early to retire risk. Q: How are conversations with potential customers progressing for the MV-250, and is M&A on the roadmap to support defense applications?A: Kyle Clark, Founder and CEO: The demand signal for the MV-250 was strongly validated at Farnborough, with keen interest from the highest levels of the U.S. Military and foreign military interest. We are working towards a rapid prototyping contract. On M&A, we recently acquired an AI company focused on the validation and verification of safety-critical code within our flight controllers, addressing the hardest problem in the industrycertification. This is part of our strategy to focus acquisitions on the most challenging issues. Q: Can you discuss the aftermarket profit opportunity, and how higher energy density batteries may impact customer placement and battery margins?A: Kyle Clark, Founder and CEO: Higher energy density batteries increase aircraft performance and payload, which is what customers like UPS want. They don't necessarily want more range; they want more payload and volume. As energy density improves, the accessible city pairs increase exponentially, which is good for customers and Beta. Herman Cuto, CFO, added that the component business typically carries a 40% to 60% margin, with flight control computers carrying a much higher margin. Q: Can you provide an update on the hybrid electric engine partnership with GE Aerospace and the future of that collaboration?A: Kyle Clark, Founder and CEO: We have multiple programs with GE, including the hybrid turbo generator built around the CT7 for the MV-250. This partnership covers power electronics, electromagnetics, and controls. The collaboration is proving high-altitude, high-speed, high-temperature, and high-voltage capabilities. The level of integration between GE, Beta, and Sikorsky is extremely positive, and the rate of technical development and flight demonstrations is exceptional. Q: Can you elaborate on the opportunity for component sales beyond flight control computers and motors, and what other components have a viable market?A: Kyle Clark, Founder and CEO: We have sold motors, propellers, inverters, high-voltage systems, flight control computers, flight controls, batteries, and lightweight data acquisition systems. These sales are sticky because customers design their control laws around our hardware. Our strategy is to get designed in early, generate margin, and grow with the programs. Herman Cuto, CFO, noted that the component business carries a 40% to 60% margin, with flight control computers being significantly higher. Q: What should we expect from the EIPP operations going forward, and will they be similar to the initial demonstration?A: Kyle Clark, Founder and CEO: The initial EIPP flight was executed within hours of the contract, demonstrating readiness. Now we are expanding to other jurisdictions and moving into Part 135 operations with a repeatable cadence of multiple flights per day. Herman Cuto, CFO, added that over the next four to six weeks, we expect Louisiana and Texas to come online with customers like Metro, Bristow, and Future Flight Global, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Wednesday, July 29, 2026 at 9:00 a.m. ET Vice President of Investor Relations - Nicole Shelton Chairman and Chief Executive Officer - Phebe Novakovic President - Danny Deep Chief Financial Officer - Kim Kuryea Operator: Good morning, and welcome to the General Dynamics Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Nicole Shelton, Vice President of Investor Relations. Nicole Shelton: Thank you, operator, and good morning, everyone. Welcome to the General Dynamics Second Quarter 2026 Conference Call. Any forward-looking statements made today represent our estimates regarding the company's outlook. These estimates are subject to some risks and uncertainties. Additional information regarding these factors is contained in the company's 10-K, 10-Q and 8-K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations page of our website, investorrelations.gd.com. On the call today are Phebe Novakovic, Chairman and Chief Executive Officer; Danny Deep, President; and Kim Kuryea, Chief Financial Officer. I will now turn the call over to Phebe. Phebe Novakovic: Thank you, Nicole. Good morning, everyone, and thanks for being with us. You may recall that at the outset of his remarks at the end of the first quarter, Danny described it as a very powerful quarter. This quarter is even better in almost all respects. Earlier today, we reported earnings of $4.24 per diluted share on revenue of $14.1 billion, operating earnings of $1.460 billion and net earnings of $1.160 billion. These results compare quite favorably to the year-ago quarter as well as sequentially. For example, against the year-ago quarter, revenue is up 8.1%, operating earnings are up almost 12%, and net earnings are up 14.4%. As a result, earnings per diluted share are up $0.50 or 13.4%. The operating margin for the entire company is 10.4%, a 40-basis-point improvement over the year-ago quarter, which, coupled with the revenue growth, led to very strong earnings growth. While Aerospace and Marine led the way on revenue increases, each of the other 2 segments had revenue increases as well. With respect to operating earnings, Aerospace led the way with a 26.6% improvement, followed by Marine Systems with a strong 17.5% increase. Sequentially, against a very good first quarter, revenue is up 4.5%, operating earnings are up 2.8% and diluted earnings per share are up $0.14 or 3.4%. On a year-to-date basis, revenue of $27.6 billion is up 9.1%. Operating earnings of nearly $2.9 billion are up 11.9% and earnings per share are up $0.95 or 12.8%. We beat consensus by $0.28 in the quarter on more revenue, more operating earnings and better operating margins than is expected by the sell side. In short, it was a superb quarter and first half. Let me ask our CFO, Kim Kuryea, to provide some detail on our strong order activity, rapidly growing backlog, and superb cash generation as well as other relevant financial data. Kimberly Kuryea: Thank you, Phebe, and good morning. I'll start with our outstanding cash performance for the quarter. We generated $1.9 billion of operating cash flow, which when combined with the strong $2.2 billion from the first quarter, yields over $4 billion of operating cash flow in the first half of the year. Each of our segments contributed nicely, exceeding their planned cash flows and driving operating working capital down over $1 billion from the end of 2025. Capital expenditures totaled $234 million or 1.7% of sales in the quarter. Compared to the first half of 2025, capital expenditures were up nearly 30% to $437 million. We continue to expect capital expenditures between 3.5% and 4% of sales for the full year. You should expect the profile of our investment to grow significantly in the back half of the year as we continue to invest, especially in our shipyards, to accelerate production and meet future demand. After capital expenditures, our free cash flow was $1.6 billion for the quarter, yielding a cash conversion rate of 142% and $3.6 billion for the first half, a cash conversion rate in excess of 150%. Given our strong cash performance so far, we now expect a free cash flow conversion rate a little north of 100% of net income for the year, let's say, around 105%. That said, we will have a lighter second half than the first, which is due to higher planned capital expenditures, which I've already discussed, and 3 other factors I'll address now. First, pension. We have decided to contribute approximately $500 million to our pension plans. Given favorable market returns over the last few years, the funded status of many of our plans are near full funding, and this contribution will allow us to derisk those plans and eliminate significant volatility going forward. Second, our cash taxes are weighted toward the back half of the year with over $500 million of payments expected. Third, we will be working down some advance payments on new programs at European Land Systems during the second half. Now to round out the cash discussion. From a capital deployment perspective, in the quarter, we paid dividends of approximately $430 million and repurchased about $100 million of our common stock to cover dilution. Finally, we repaid $500 million of notes that matured in June. We have another $500 million of notes coming due in August that we anticipate repaying with cash on hand. At this time, we don't anticipate refinancing these maturities during the year, but we will continue to evaluate market conditions and potential borrowing needs as the year progresses. All in all, we ended the quarter with a cash balance of approximately $4.3 billion and a net debt position of $3.2 billion, down $1.2 billion from last quarter. Next, on to orders and backlog. We had another strong quarter with just shy of $20 billion of orders, yielding an overall book-to-bill ratio of 1.4-to-1 for the company. Book-to-bill in all 4 of our operating segments was greater than 1-to-1. In Aerospace, our dollar-based book-to-bill was 1.5x. This is the strongest first half for orders for Aerospace since 2022 and reflected very solid demand across the entire Gulfstream product line. In the Defense segment, book-to-bill was 1.4x, led by the Combat Systems segment at 2.1x, which received several large contracts, including the production of new armored combat support vehicles, ACSVs, for the Canadian Armed Forces. We ended the quarter with a record level of backlog of $136.5 billion, up 32% from a year ago. Backlog was also a record high for each of our segments. Our total estimated contract value, which includes options and IDIQ contracts, ended the quarter at $186.9 billion. Turning to interest. Our net interest expense in the second quarter was $49 million compared to $88 million in the respective 2025 period, and $118 million for the first half of 2026 compared to $177 million in the first half of 2025. The decrease in our interest expense is due almost entirely to the interest we paid for commercial paper borrowings in 2025. We have not been in the commercial paper market in 2026. Further, our interest income increased in 2026 as we held higher cash balances. At this point, our expectation for net interest expense for the year is approximately $270 million. Finally, the effective tax rate in the quarter was 17.6%, bringing the tax rate for the first half to 17.7%. This rate is a little higher than our outlook for the full year, which remains around 17.5%. Phebe, that concludes my remarks. I'll turn it back over to you. Phebe Novakovic: Thanks, Kim. Now I will briefly review the financial performance for each of the groups, and Danny will interject additional details. First, Aerospace. Aerospace had a very good quarter with revenue of $3.5 billion and operating earnings of $510 million with a 14.5% operating margin. Revenue is $463 million more than last year's second quarter, a 15.1% increase. To give you a little perspective here, the increase is attributable to 3 more deliveries and higher service revenue at both Gulfstream and Jet Aviation. The 41 deliveries in the quarter are somewhat more than planned. Operating earnings of $510 million are up $107 million, driven in part by the increased revenue, but most importantly, by a 130-basis-point improvement in operating margin. There are no unusual items of significance. As a result, the improvement quarter-over-quarter comes from a lot of measurable improvements across the entire business. Danny Deep: From an operational perspective, we are off to a strong start to the year. Phebe mentioned 41 deliveries in the quarter. This is 3 more than the year-ago quarter and sequentially as well. We see durable productivity improvements on all new aircraft types with modestly improved margins both year-over-year and sequentially. We performed quite well across all service categories at both Gulfstream and Jet Aviation with improved operating earnings at each, both quarter-over-quarter and sequentially. You might note that the second-quarter overall operating margins are down sequentially despite the fact that operating margins by line of business all improved. This is attributable to a slightly disadvantageous mix plus a modest increase in both G&A and R&D. Phebe? Phebe Novakovic: Turning to market demand. Aerospace had a 1.5x book-to-bill in the quarter with 16 more airplane orders than the year-ago quarter and 20 more than the first quarter of this year. The book-to-bill over the trailing 12 months is 1.3x. So we see very active interest across all models in the U.S. and Asia, with some cautious concern from customers in the Middle East, but they're still active in the pipeline. In summary, the Aerospace team had a special quarter, both operationally and in terms of order activity. So let's move on to the defense businesses. First, Combat. Combat Systems had revenue of $2.3 billion, up marginally over the year-ago quarter. Earnings of $318 million are down $6 million. Margins at 13.9% are down 30 basis points against the year-ago quarter, due largely to mix. There was increased revenue performance at Ordnance and Tactical Systems and European Land Systems, offset by a decline at Land Systems. Sequentially, revenue is up modestly, but earnings are up 2.6% on a 30-basis-point improvement in operating margin. The real good news story here is the order performance at 2.1-to-1 book-to-bill continues to build strong significant backlog. A large portion of the order activity in the quarter was at Land Systems. Demand for Combat Systems products is strong, primarily driven by U.S. allies. Orders for wheeled and tracked vehicles are up, reflecting the increased threat environment. In addition, OTS continues to have particularly strong growth in munitions. Danny Deep: So I want to repeat what I said last quarter because performance this quarter further demonstrates the strength and breadth of the combat portfolio, particularly with international vehicles as well as our munitions group. It's encouraging during this period of transition and recapitalization to next-generation platforms for our U.S. land force customers that the overall group continues to provide a healthy growth outlook with very nice margins. You have seen the 2.1x book-to-bill in the quarter. We're confident there is more to come. Phebe? Phebe Novakovic: So turning to Marine Systems. Once again, our shipyards are each demonstrating strong revenue growth. This quarter's growth of 10.4% was driven by the Columbia and Virginia-class programs, followed by NASSCO and Bath expressed in dollar increases. However, in growth expressed as a percentage of revenue, both NASSCO and Bath outpaced Electric Boat for the first time in my memory. Earnings improved 17.5% on a 40-basis-point improvement in operating margin. We can point to clear and measurable productivity gains. As you know, to support this growth, we have made significant investments in each of our shipyards, particularly at Electric Boat. We will continue to invest as we go forward to support the additional demand we see in the national security interest of the United States. Turning to operating performance... Danny Deep: As Phebe mentioned, momentum continues to build at each of our shipyards, and we are making good progress with our efforts to accelerate build rates. A great example of this is at Bath Iron Works, where our most recent DDG-51 destroyer delivery was accelerated by almost 3 months versus plan due to the excellent performance of the ship in its sea trial. At Electric Boat on the Columbia program, we had a significant increase in the number of hours earned as compared to both the year-ago quarter and sequentially. In the first half of this year, the hours earned are up 37% versus the same period last year. Material deliveries also continue to improve with a 65% increase in sequence-critical material this quarter over the second quarter last year. Let me state the obvious. This is the segment, given its backlog and improving productivity, where we can accelerate value for our shareholders as we accelerate delivery of submarines, surface combatants and auxiliary ships. Continuous operational improvement has our undivided attention and focus. Back to you, Phebe. Phebe Novakovic: So finally, Technologies. This group is also experiencing growth in revenue and earnings, albeit not at the pace experienced by Aerospace and Marine Systems. Revenue of $3.6 billion is an increase of 4.1% over the second quarter of 2025. Both businesses contributed respectable growth, but Mission Systems led the way. Operating earnings of $339 million are up 2.1% over the year-ago quarter. Operating margin decreased 20 basis points from 9.6% to 9.4%. The group's order activity was also encouraging with a book-to-bill of 1.1x for the quarter and 1.3x for the trailing 12 months. Danny Deep: Growth in Mission Systems came from across the portfolio, most notably in Land and Air Systems and in their international portfolio. The international portfolio was up more than 35% since 2024, and we expect that to continue to be a key driver of growth for the year and beyond. In IT services, we've discussed elongated procurement cycles and that continues. But a real bright spot has been GDIT's success in capturing programs under agile contracting mechanisms such as other transaction authorities, or OTAs. GDIT has submitted and won more OTAs in the first half of 2026 than for all of last year. Phebe Novakovic: So let's turn to guidance for the rest of the year. At the outset, I want to review what we've told you to date. In January, we told you to assume an EPS range of $16.10 to $16.20. In April, our updated guidance for 2026 was an EPS range of $16.45 to $16.55. With that as a predicate, let me proceed to provide our operating forecast for the remainder of '26 with some specifics around our outlook for each business group and then a company-wide roll-up. For 2026, we now expect Aerospace revenue of around $13.8 billion. Gulfstream will still deliver about 160 airplanes. There is some potential upside delivering large-cabin aircraft and some risk on the 280 deliveries for obvious reasons. We anticipate a 14.7% operating margin for the year. The third-quarter operating margin will be about the same as this quarter with a better fourth quarter. In Combat, we expect revenue of about $9.8 billion, coupled with a 13.8% operating margin. As noted earlier, the Marine group has been on a remarkable growth journey. Our outlook for the year now anticipates revenue around $18 billion with an operating margin for the year of 7.4%. In Technologies, we expect revenue of $14.1 billion and an operating margin of 9.4%. So for 2026, company-wide, we expect to see revenue of approximately $55.7 billion and operating margin of 10.5%. You've already heard Kim's commentary about our estimates for cash flow for the year, tax rate and interest expense. All this rolls up to an increased EPS forecast of $16.80 to $16.90 for the year. To wrap up, as we go into the second half coming off a very strong first half, we feel very good about the potential for the second half and the full year. Nicole, back to you. Nicole Shelton: Thank you, Phebe. [Operator Instructions] Operator, could you please remind participants how to enter the queue? Operator: [Operator Instructions] Your first question comes from David Strauss from Wells Fargo. David Strauss: Maybe, Phebe, with the backlog increase that we saw this quarter at Aerospace, could you talk, maybe in terms of years of production, how far out that extends and how much you could take production up from kind of current levels to start to eat into that backlog? Phebe Novakovic: So you've followed us long enough to know that some time ago, we ceased giving you the details about model and years out. That became a very competitive issue. But look, we will -- the supply chain has stabilized. We're getting -- coming down our learning curves on all of our products. We're still working through some of the challenges on completion. So it's just a question of pace. So we'll take all of this into due consideration and give you some real clarity next year what to expect. David Strauss: Okay. And a quick follow-up on Marine. It has consistently exceeded kind of expectations and the growth outlook that you've outlined. And it looks like for the rest of the year, you're forecasting kind of minimal growth in the second half of the year. Maybe if you can just talk about kind of the longer-term trajectory here. I mean I know it's law of large numbers at this point, but is there a reason to believe that Marine growth meaningfully decelerates kind of from the levels that we've seen? Danny Deep: Yes. Let me take that one. I think the second half as compared to the first half is really just a function of material receipts, stuff that we received in the first half that we're actually now installing. And as you know, it's important to reflect that we've increased sales for 2026 over 2025 by almost $1.3 billion, which exceeded even what we thought. I think we'll see it continue to grow, maybe not quite at that pace, but certainly, we're getting up into, as you say, a law of large numbers. But we don't have any expectation that it will slow down much because there's just volume out there that we have to execute on. But it's natural tail off in the second half of the year compared to the first. Operator: Your next question comes from Ron Epstein from Bank of America Merrill Lynch. Ronald Epstein: So on Marine, just following up on Marine, where are we on build rate on Virginia-class now, right? I mean, are we still like 1.3 a year, 1.4? I mean, is there -- can you maybe put something around that? Danny Deep: Yes. We don't typically give the exact build rate. We leave that to the Navy. But as you know, we're trying to get to 2 Virginia-class and 1 Columbia in the early 2030s time frame. And we're on that path, and we're actually where we expect to be at this point in the process. Ronald Epstein: Okay. So you're making strides with the supply chain. It's my understanding that, that was one of the hurdles. Danny Deep: Yes. I mean we have seen significant improvements in their pace and the cadence of delivery. I mean, there are still some challenging areas, as I think we mentioned in the last call, where we have single sources of supply. But generally, the supply chain is improving, and we're counting on it to continue to improve. Ronald Epstein: Great. And Phebe, one for you. How are you thinking about the budget process now as we go into fiscal '27? You probably know the budget process better than anybody in Washington. How are you thinking about it? Like how should we think about it? It seems like there's so much volatility in terms of there is going to be reconciliation, there isn't; there's a baseline, there's not; there's midterm. So kind of broadly, how do you think about it? Phebe Novakovic: Yes. So I would say that there are a lot more factors today influencing the budget than there have been historically. But from our perspective, a lot of our programs are funded in the base budget. But the reconciliation is important, because if you stop and think about it, weapons production has been on very low-rate production or fairly minimally sustaining production for quite some time. And in order to gear up production to meet the current threat environment, we need additional funds and the entire industry does. And so this is, I think, from a national security perspective, meritorious. So there are a lot of moving parts on all of this, and we'll continue to support our customers and the Congress as best we can. Operator: Your next question comes from Myles Walton at Wolfe Research. Myles Walton: Phebe, I was wondering if you can maybe talk about the M&A backdrop, which you haven't been as active in, in the last several years. But I'm curious if there's any interest in reengaging given obvious balance sheet strength, the DoD's relatively negative view on share repurchase overall. What does your M&A pipeline look like? What kind of properties would even be attractive to you at this point? Phebe Novakovic: Nice try. Look, this is something we always look at and something we never talk about. I just think that's imprudent. But it's always on our mind. So you can rest assured about that. You want to ask another question? Myles Walton: Would you say there's any shift in the way you look at it, even if you can't speak to it? Phebe Novakovic: No. No, we've consistently looked at it this way when we have met some of our other obligations with respect to cash, or if there's a particularly attractive bolt-on out there. But we are doing what we always have done, it's understand the marketplace and see what if anything makes sense. But golly jeez, we just never talk about it. Myles Walton: Okay. Maybe one that maybe, Dan, you can talk to, or Phebe, on the missile framework agreements. Have you seen in Combat, within OTS, much of that coming your way on second-source solid-rocket motors, particularly with some of the interest of aggressive dual sourcing? Danny Deep: Yes. So we are a subcontractor, both at OTS and Mission Systems, to a number of the missile primes, and we have some content on all of the missiles for the most part with things like actuators and motor cases at OTS and guidance systems and other components at Mission Systems. So the framework agreements that the primes have signed up to, we have mirrored agreements with them to ramp up. And so we're, again, a part of the supply chain, but certainly not a prime there. Operator: Your next question comes from Robert Stallard of Vertical Research. Robert Stallard: This might be for you, Phebe, or for Danny. But it sounds like the supply chain across the group is getting better. I was wondering if you could confirm that. And if there are any areas of concern that still exist as you look forward to the rest of the year? Danny Deep: Yes. I would say, broadly speaking, when we look across the areas that maybe we highlighted in the past that were causing some difficulties, there has been a noticeable improvement in the cadence. Areas of concern haven't really changed where we have single sources of supply for large complex components, and that can be somewhat of a pacing item. But when we look across the entire enterprise in each of the operating units, there has been a noticeable improvement in the supply chain, and that's a really good thing. Robert Stallard: Okay. And a quick follow-up. There was some news overnight about the Virginia-class submarine Block VI being approved by the Secretary of the Navy. I was wondering if you could give us some sort of preliminary thoughts on how the next block of submarines could differ from Block V in terms of contractual terms or accounting or something like that? Phebe Novakovic: So we saw that as well. We're told that these contracts will be coming soon. And when we get those, let's give you the clarity that you're seeking here. I think that's best done after the awards are granted. Operator: Your next question comes from Doug Harned from Bernstein. Douglas Harned: On Combat, you've gotten some really, really good increases in backlog. And as we had looked at this before, we saw a lot of the growth coming from European Land Systems. But now these awards are much outside of Europe. When you go forward, how do you see growth now across geographies? Do you have more optimism in a sense about growth coming from the U.S.? Phebe Novakovic: So I think what we expect to see is double-digit growth continuing at European Land Systems given the threat environment and the demand for combat support vehicles as well as other systems, OTS because of artillery missile components, 155. And then within Land Systems, this is a transition period, as we talked about before, but the double-digit growth at OTS and ELS ought to drive high-single-digit growth for the group going forward. Douglas Harned: And then switching over to Gulfstream. You're in a great demand situation, certainly working on the supply chain. But as you go forward, you'll soon have the full portfolio of G400 and G800 out there, how do you think of having that portfolio of aircraft with commonality? Which customers does that portfolio breadth particularly appeal to? And does it give you some margin opportunities ahead in pricing? Phebe Novakovic: So we built this family of aircraft to satisfy the missions that we knew that our customers flew, and they're varied. Some customers want a suite of airplanes, from the large ones to the medium-sized ones, depending on where they fly, how they fly, and who they fly. There are others who are primarily driven by large cabin given their missions. And so we see -- this is the intent of this whole family of aircraft. So there are certainly some benefits as we continue to come down our learning curve there. And of course, as you know, we never discuss pricing, but from my point of view, given the broad spectrum of offerings that we have and will have once the 300 and 400 are out in the market, new product has driven demand. That's always been our view, and it continues to remain our view. This is a wholesome portfolio. Operator: Your next question comes from Sheila Kahyaoglu with Jefferies. Sheila Kahyaoglu: I wanted to ask 2 questions on margins. One on Aerospace. So on Aerospace, as we think about margins, up 100 bps from first half of '25. How do we think about the margin baseline from here, whether it's model mix? Phebe, I think you mentioned Q3 will look similar to Q2 given timing of higher G&A and R&D. How do you think about opportunities for upside for Aerospace margins from here? Danny Deep: Yes. I think from a margin standpoint, as Phebe mentioned in her remarks, I think the third quarter will look a lot like the second quarter with the fourth quarter being the strongest from a margin standpoint. And that is, as Phebe mentioned, the fact that we're coming down the learning curve on all of the airplanes, but also due to favorable mix. And I think the margins, you can expect them to continue to be in that neighborhood with some slight variability all associated with mix. Sheila Kahyaoglu: Okay. And then on Marine, you raised the margins up 10 bps. It seems small, but a big deal from where you guys have come from. I guess, can you provide an update on where the workforce supply chain is from here on Marine? Any risks? And is this a good baseline to work off of? Danny Deep: Yes. From a workforce standpoint, we've been really pleased with our ability to attract and retain the necessary number of workers in our shipyards and... Phebe Novakovic: And the Navy has been a help. Danny Deep: And the Navy has been a great help with that in a lot of different ways. And so from a ramping standpoint, we are hitting exactly what we need to hit from a resource standpoint on that front. So very positive from that perspective. And then as you mentioned, from a margin standpoint, the improvement in margin is a function of throughput and improvements on the deckplates and with the supply chain improving. And we can expect that, that will continue a slow, steady drumbeat as we continue to focus on executing. Operator: Your next question comes from Seth Seifman with JPMorgan. Seth Seifman: I wanted to ask about -- like, of course, most of our conversations tend to revolve around subs, but you talked about the high percentage growth in surface ships, and it was pretty nice growth in the first quarter as well. When we think about the growth potential for that portion of the business over the next several years, given what's been in recent shipbuilding budgets and what may be ahead of us, is there any way to dimensionalize the growth opportunity outside of the submarine portion of the business? Phebe Novakovic: Yes. So at Bath, growth will continue as we improve our throughput and productivity, which they are doing and have done materially over the last few years. And at NASSCO, again, it will be driven by increased demand and coming down our learning curves on the oilers and other support and supply ships. NASSCO is very well positioned and has been for some time. It's a high-performing shipyard, and it has the capability, design and manufacturing capability to design and produce complex auxiliary ships, sub tenders, oilers. So we like very much the positioning that NASSCO is in, and we see some growth there as well with additional product coming in, because they have additional capacity, by the way. Seth Seifman: Excellent. Very good. And then one follow-up on Technologies and GDIT. We've seen the administration be very vocal about a desire to shift to fixed-price contracting. When you think about the impact there for GDIT, how quickly do you see that change happening? Phebe Novakovic: So we've always encouraged fixed-price contracting when it's appropriate and the customer is interested. So we see additional interest in fixed price, which we welcome. And we're also very interested in agile acquisition programs and pipelines that allow us to bring product quickly to our customers. GDIT is very fast in what they execute, and their investments that they've made over the last few years have well positioned them in the marketplace. Operator: Your next question comes from Gautam Khanna with TD Cowen. Gautam Khanna: I was wondering, Phebe, if you could opine on Aerospace margin potential a couple of years out. I know, about a year or 2 ago, you did. I mean, you did it then. Phebe Novakovic: We haven't -- let me interrupt you, because we haven't given you, I think in the whole tenure of this leadership team, any kind of out-year. I think once or twice we've given you some out-year color. We're not going to go there on margin. But let's just say both Jet Aviation and Gulfstream are high-performing companies, and they'll continue to improve over time. You can ask another question. Gautam Khanna: Yes. Just relative to prior peak, given the model introductions you're doing, et cetera, is that a reasonable baseline to prior peak margins? Phebe Novakovic: Look, the prior -- yes, again, I'm going to interrupt you, because the prior peak was really all around 1 product, and this is now a portfolio of products. From large cabin to midsized cabin, they carry different margins with them. By definition, they do. So it's a more complicated, more robust and I think, frankly, a richer product offering for the market to avail itself of, and we're seeing that. So we're not going to get into the business of how good can it get at the moment, but you will see continued performance within this construct of this new business model that we've got as a result of the investments we've made in these family of aircraft. Gautam Khanna: Great. And then just on the shipbuilding contracts, the submarine contracts you're awaiting, is there any -- like what forces the urgency on the customer side to place the order? I just wonder what capabilities are lost if they delay? Because we've been waiting for quite some time. I'm sure you guys have been aware that the Street has been expecting these for about a year now. And I just wondered what consequence happens if we go another quarter? Phebe Novakovic: Yes. I think the customer and the submarine industrial base are aligned around the need for getting these contracts out, particularly to stabilize the industrial base and to ensure that we continue to have long lead material for these contracted in advance of these long-term development programs. But as I noted, we're told that the contracts will be coming soon. And so we're confident that when they come out, I think it will be as we expected and very welcomed by the supply chain in particular. Operator: Your next question comes from Kristine Liwag with Morgan Stanley. Kristine Liwag: Phebe, I want to dive in a little bit deeper into GDIT. In the past few quarters, you've talked about how AI was a big driver of growing demand, particularly in defense. So when we think about these AI models maturing and pilot programs going to larger product deployments, how do you think about the role of AI? And how is GD positioned in that ecosystem? Ultimately, is this more of an acceleration of earnings growth for now? Or do you think operational efficiencies in AI could potentially shrink the addressable market? Phebe Novakovic: Are you asking across the company as a whole or GDIT? Kristine Liwag: Maybe GDIT in particular for this question. Phebe Novakovic: Yes. So let's step back a minute and remember how GDIT has been strategically thinking about innovation in general for the last few years. And they've invested in what they call their digital accelerators, which we've talked about before, including an early focus on AI and automation. And that focus has provided them the skills to build and secure and connect the latest technologies and apply them to a growing number of agencies and systems. And what we're seeing is AI tightly integrated in with cybersecurity and opportunities that, frankly, are spanning most of GDIT's portfolio. It also helps to have deep and rich relationships with a number of the OEMs and partners. So GDIT has been very agile in its strategic, I think, planning as well as implementation of AI and automation as well as other important technology improvements. Kristine Liwag: Great. Super helpful. And Phebe, my follow-up question, I know it's longer term, so maybe you won't answer it, but I hope you would. When we look at the pricing model for Aerospace, it's clear that in the past decade or so, we've seen the premium end of the business jet market really more look like the luxury market. In the luxury market, you see margins north of 20% EBIT over time. I guess with your portfolio, which is arguably the strongest brand, and also with the refresh of the portfolio, it is really unique in the market. Is there upside to your pricing power over time where you can get towards those luxury-type margins? I mean, it is much harder to build an aircraft versus handbags and champagne, but those guys have higher margin. Phebe Novakovic: I got you. So I'm going to quarrel with you on 1 word, luxury. I would argue that is a misapprehension or characterization of these, but really are tools. And for almost all -- for all of our Fortune 500, Fortune 100 companies and both public and private, they are business tools. There are some high net worth individuals who participate in the market, but even they will tell you -- even in those cases, they'll tell you this is really about efficiency -- safety, efficiency and efficacy in doing their jobs. So I think that's important. These are not luxury yachts that sail around the Mediterranean. These are airplanes that get the job done for our customers, whatever their mission is. So look, we are well-positioned in the marketplace because we have all these new products that we've heavily invested in and that we are producing and producing at scale and well with the attention we've always had on quality and safety. So I think by definition, that positions us well in the market without getting into any specificity about out-year margin performance, but we believe in the capability of both Jet Aviation and Gulfstream to continue to improve and continue to produce with this family of airplanes. Does that help you? Kristine Liwag: It does. Thank you, Phebe. Operator: Your next question comes from Scott Deuschle with Deutsche Bank. Scott Deuschle: Danny, are G700 margins approaching mature levels at this point? Or is there still a meaningful gap between where margins are today on G700 and where mature margins might ultimately land? Danny Deep: Yes. I think we're still coming down the curve, specifically around completion. So I think there's still more opportunity, and we're seeing that both on the G700 as well as the G800. So I think there's still more room for them. Scott Deuschle: Okay. And then Phebe, can you share an update on the G300 and G400 development time lines, and your latest expectations as to the timing of EIS for each of those aircraft? Phebe Novakovic: Yes. Well, as you know, I'm no longer in the business of estimating EIS given that the regulators set the pace. But with respect to the 300, and thank you for raising that because I think it's important to recognize that we're going to have a gap in production from the end of the 280, which the final 280 ought to deliver in the second quarter of next year, and the onset of the 300, which late '27, early '28, somewhere in that. And so we'll have a planned production break, so that if you infer from that quite correctly, that we'll talk more about large cabins next year. On the 400, we've whipped up our efforts on the 400, and we'll have more to say over the next couple of quarters about where we think the 400 will be, but these new airplanes are coming, and we're pretty excited about it. Scott Deuschle: Does that production break create any kind of absorption pressure that we should be aware of? Phebe Novakovic: No, not given the agreement we have with our partner, who, by the way, has, in this environment, continued to perform beautifully and has its relentless excellence emphasis on quality. But for obvious reasons, some production may lag a little bit at the end of this year. And then we have this bit of a gap on the 300. Nicole Shelton: So Dara, I think we have time for 1 more question. Operator: Our last question comes from John Godyn with Citigroup. John Godyn: I wanted to just double-click on Aerospace supply chain, if you don't mind. Obviously, it's humming for you guys. There are other players out there that have been struggling a bit. Do you feel like you guys are doing something special, obviously, executing well, but special, or perhaps the issues that we're seeing elsewhere are idiosyncratic to those companies? Danny Deep: Yes. I can't speak to the situation at some of these other companies. I can tell you that for the major components, Gulfstream has a very clear relationship that has really given the supply chain visibility into our production plans for whatever period is appropriate. And so they are able to keep up now, and our expectation is they will be in the future as well. So I don't know what the others are seeing, but we're pretty tightly integrated with these key suppliers, and they're keeping up. Phebe Novakovic: And their ability to -- the supply chain's ability to continue to produce and produce on schedule has been very helpful in ensuring that we continue to drive our orders. And orders were, of course, a big component of our -- a significant component of our cash for this quarter. So it's really a team effort between Gulfstream and its suppliers. John Godyn: Excellent. And if I could just ask a follow-up. Earlier, Ron, Phebe, asked about the outlook for Defense, and you mentioned the resiliency in the portfolio. I just wanted to re-ask that, but with a focus on the Technologies portfolio specifically. Maybe you can speak a bit about the sensitivity of that portfolio to extended CRs or alternatively to the upside, a budget environment that's more in the direction of Trump's request? Phebe Novakovic: So we have handled, in the Technologies group, which are both fairly relative to our portfolio at large, faster cycle businesses. We've managed the CRs pretty well. So I would expect us to be able to do so as long as they're not too extended. I think both businesses are poised for some growth. Particularly, Mission Systems, as you recall, has gone through a transformation from a lot of legacy systems into investments in new programs and new products, and that is beginning to take off. So we continue to see continued strong growth there and the steady growth that we have seen -- steady incremental growth we have seen at GDIT. And look, they've got a pretty robust pipeline at about $120-plus billion. That's a qualified pipeline out there. So that positions them well to continue to perform across their hundreds of programs. That's both for Mission Systems and GDIT. And it's all about your ability to meet your customers' needs quickly and with excellent products and quality on time. Nicole Shelton: Great. Well, thank you, everyone, for joining our call today. As a reminder, please refer to the General Dynamics website for the second quarter earnings release and highlights presentation. Finally, we want to let you know that we expect to hold our Q3 earnings call on Friday, October 30, at 9:00 a.m. We will resume our normal schedule for the fourth quarter call. If you have additional questions, I can be reached at (703) 876-3152. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in General Dynamics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and General Dynamics wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. General Dynamics (GD) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

General Dynamics Corporation GD reported second-quarter 2026 earnings of $4.24 per share, beating the Zacks Consensus Estimate of $3.95 by 7.3%. The bottom line increased 13.4% from $3.74 in the year-ago quarter, reflecting higher operating earnings and lower net interest expense. Total Revenues of GD Revenues of $14.09 billion surpassed the consensus mark of $13.49 billion by 4.5% and rose 8.1% year over year. Growth across all four segments, led by Aerospace and Marine Systems, supported the top line. General Dynamics Corporation price-consensus-eps-surprise-chart | General Dynamics Corporation Quote Aerospace revenues increased 15.1% year over year to $3.53 billion. Operating earnings surged 26.6% to $510 million. The operating margin expanded 130 basis points to 14.5%.Marine Systems revenues advanced 10.4% to $4.66 billion. Operating earnings increased 17.5% to $342 million. The segment’s operating margin improved 40 basis points to 7.3%.Combat Systems revenues were $2.29 billion, up 0.3% from the prior-year quarter. However, operating earnings declined 1.9% to $318 million, while the operating margin contracted 30 basis points to 13.9%.Technologies revenues increased 4.1% year over year to $3.62 billion. Operating earnings improved 2.1% to $339 million. The operating margin declined 20 basis points to 9.4%. Operating earnings totaled $1.46 billion, up 11.9% from the year-ago quarter’s $1.31 billion.Operating costs and expenses increased 7.7% year over year to $12.63 billion.Interest expenses decreased 44.3% year over year to $49 million. General Dynamics recorded a total backlog of $186.9 billion. This includes a backlog of $136.5 billion and estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity contracts and unexercised options of $50.4 billion. As of July 5, 2026, cash and cash equivalents totaled $4.33 billion compared with $2.33 billion as of Dec. 31, 2025.The long-term debt as of the same date was $6.26 billion compared with the 2025-end debt level of $7.01 billion.During the first six months of 2026, cash generated by operating activities totaled $4.04 billion compared with $1.45 billion in the year-ago period. GD currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. RTX Corporation’s RTX second-quarter 2026 adjusted earnings per share (EPS) of $1.89 beat the Zacks Consensus Estimate of $1.66 by 13.9%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.56.Revenues rose 14.5% year over year to $24.71 billion and outpaced the consensus mark of $22.83 billion by 8.2%.Northrop Grumman Corporation NOC reported second-quarter 2026 adjusted earnings of $7.68 per share, which beat the Zacks Consensus Estimate of $6.84 by 12.3%. The bottom line, however, declined 5.8% from the year-ago quarter’s level of $8.15.NOC’s total sales of $10.88 billion in the second quarter outperformed the Zacks Consensus Estimate of $10.80 billion by 0.7%. The top line also improved 5.1% from $10.35 billion reported in the year-ago quarter.Textron Inc. TXT reported second-quarter 2026 adjusted earnings of $1.62 per share, which surpassed the Zacks Consensus Estimate of $1.52 by 6.6%. The bottom line also rose 4.5% from $1.55 in the year-ago quarter. The company reported total revenues of $3.83 billion, which beat the Zacks Consensus Estimate of $3.82 billion by 0.15%. The top line also increased 3% from the year-ago quarter’s level of $3.72 billion. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD) : Free Stock Analysis Report Northrop Grumman Corporation (NOC) : Free Stock Analysis Report Textron Inc. (TXT) : Free Stock Analysis Report RTX Corporation (RTX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. General Dynamics Corp (NYSE:GD) reported a strong quarter with earnings per diluted share up 13.4% year-over-year. The company achieved a record backlog of $136.5 billion, up 32% from the previous year. Operating cash flow for the first half of the year exceeded $4 billion, demonstrating strong cash generation. Aerospace segment showed significant improvement with a 26.6% increase in operating earnings. Marine systems segment demonstrated strong revenue growth, driven by the Columbia and Virginia class programs. Operating margins in the combat systems segment decreased by 30 basis points compared to the previous year. The company anticipates a lighter second half of the year due to higher planned capital expenditures and other factors. There are ongoing challenges in the supply chain, particularly with single sources of supply for large complex components. The aerospace segment experienced a slightly disadvantageous mix, leading to increased G&A and R&D expenses. The technologies segment saw a decrease in operating margin by 20 basis points from the previous year. Warning! GuruFocus has detected 8 Warning Signs with GD. Is GD fairly valued? Test your thesis with our free DCF calculator. Q: With the backlog at Aerospace, could you discuss how far out production extends and potential increases in production levels? A: Phoebe Novakovic, CEO: We no longer provide detailed model and years out due to competitive reasons. However, the supply chain has stabilized, and we are addressing challenges. We will provide more clarity next year on production expectations. Q: Marine Systems has consistently exceeded growth expectations. Can you discuss the longer-term growth trajectory? A: Danny Deep, President: The growth in the first half was due to increased sales, and we expect continued growth, albeit not at the same pace. There is significant volume to execute on, and we do not anticipate a slowdown. Q: Where are we on the build rate for the Virginia class submarines? A: Danny Deep, President: We are on track to reach the goal of two Virginia class submarines and one Columbia class per year by the early 2030s. The supply chain is improving, and we expect continued progress. Q: How do you view the budget process for fiscal '27, given the current volatility? A: Phoebe Novakovic, CEO: Many factors influence the budget, but our programs are funded in the base budget. Reconciliation is important to increase production rates to meet current threat environments. We support our customers and Congress in this process. Q: Can you discuss the M&A landscape and any potential interest in re-engaging? A: Phoebe Novakovic, CEO: We always evaluate M&A opportunities but do not discuss specifics publicly. We continue to assess potential bolt-on acquisitions that make strategic sense. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. General Dynamics Corporation will release its second-quarter earnings report before the opening bell on Wednesday, July 29. Some of the company’s investors may be eyeing potential gains from its dividends. Currently, General Dynamics has an annual dividend yield of 1.63% — a quarterly dividend amount of $1.59 per share ($6.36 a year). So, how can investors exploit its dividend yield to pocket a regular $500 monthly? Don’t Miss: The Average Family’s Finances Are More Complicated Than Ever. These Tools Aim To Make Them Easier To Manage. Think Your ‘Safe’ Stocks Protect You? You’re Ignoring the Real Growth Triggers — Here’s What to Add Now To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $366,959 or around 943 shares. For a more modest $100 per month or $1,200 per year, you would need $73,547 or around 189 shares. To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($6.36 in this case). So, $6,000 / $6.36 = 943 ($500 per month), and $1,200 / $6.36 = 189 shares ($100 per month). Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time. Trending: Caught With Nothing Saved for Retirement? These 5 Game‑Changing Tips Could Still Save You How that works: The dividend yield is computed by dividing the annual dividend payment by the stock’s current price. For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40). Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield. See Also: Think you’re saving enough for your kids? You might be dangerously off — see why Photo via Shutterstock Read Next: Still Learning the Market? These 50 Must-Know Terms Can Help You Catch Up Fast Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That’s why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn’t tied to the fortunes of just one company or industry. Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly. Institutional-quality real estate has traditionally been difficult for individual investors to access. Realberry gives accredited investors direct access to private real estate opportunities backed by a team with 35 years of experience, $3.4 billion in assets under management, and $481 million in cumulative distributions paid to investors as of Q4 2025, according to the company. With a portfolio spanning 13 million square feet across seven U.S. states, Realberry focuses on acquiring, developing, and managing real estate with an emphasis on long-term value creation while its principals often invest alongside clients to help align interests. Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches. Immersed is building technology for the future of work through spatial computing. Known for its AR/VR productivity platform that enables users to work across multiple virtual screens, the company has grown to more than 1.5 million users worldwide. Immersed is also developing Visor, a lightweight headset designed specifically for professional productivity, positioning the company at the intersection of remote work, extended reality (XR), and next-generation computing. Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth. Mode Mobile is changing the way people interact with their phones by letting users earn money from the same apps and activities they already use every day. Instead of platforms keeping all the advertising revenue, Mode Mobile shares a portion back with users who engage with content, play games, and scroll on their devices. Named one of Deloitte’s fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns everyday smartphone usage into a potential income stream. For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000, with only ~5% of opportunities passing their due diligence process. © 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

General Dynamics (GD) came out with quarterly earnings of $4.24 per share, beating the Zacks Consensus Estimate of $3.95 per share. This compares to earnings of $3.74 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.34%. A quarter ago, it was expected that this defense contractor would post earnings of $3.68 per share when it actually produced earnings of $4.1, delivering a surprise of +11.41%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. General Dynamics, which belongs to the Zacks Aerospace - Defense industry, posted revenues of $14.09 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.48%. This compares to year-ago revenues of $13.04 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. General Dynamics shares have added about 16.8% since the beginning of the year versus the S&P 500's gain of 8.5%. While General Dynamics has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for General Dynamics was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $4.11 on $13.63 billion in revenues for the coming quarter and $16.66 on $55.16 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, StandardAero, Inc. (SARO), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of +75%. The consensus EPS estimate for the quarter has been revised 2.9% higher over the last 30 days to the current level. StandardAero, Inc.'s revenues are expected to be $1.58 billion, up 3.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD) : Free Stock Analysis Report StandardAero, Inc. (SARO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research