GD US S&P 500Russell 1000 Earnings call
General Dynamics (GD) · Q1 2026 results and valuation
Share price: $367.22 · 2026-11-11
General Dynamics is an aerospace and defense company that designs and manufactures business jets, marine systems, land combat vehicles, and weapon systems. The company provides products and services to the aviation and defense markets globally. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. Source: 10-K annual report (2026-01-30)
Results Q1 2026 vs Q4 2025 · previous quarter · published 29 Apr 2026 and 28 Jan 2026
Net income down 1.6% on the previous quarter. Management sounded upbeat, though noticeably less so answering analysts.
1 · Numbers
−1.6%
Net income vs Q4 2025
Outlook given
Net income 1.12B vs 1.14B
Revenue −6.2%
Why Against the same quarter last year, net income rose mainly because of two more aircraft deliveries, higher services revenue at Gulfstream and Jet Aviation, and a 50 basis point expansion in Mission Systems margins driven by a favorable product mix.
2 · How management spoke
Upbeat
More upbeat than 75% of company calls
Answers to analysts: restrained, but clearly less so than the script.
Last call it was different: the answers were more upbeat than the script.
3 · What stood out
General Dynamics reported a total backlog of $131 billion, representing a 48% increase over last year and an 11% increase over the previous quarter.
Valuation
Is General Dynamics undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 10.1% growth a year (3-year revenue growth), the model's fair value is $332.12 a share — the stock trades 11% above it. Today's price assumes 11.4% growth a year.
Current price
$367.22
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+11.4% for 10 yrs
Fair value / share
$332.12
Buy below
$249.09
Price vs fair value
Overvalued 11%
Price vs buy-below price
Overvalued 47%
Read between the lines
-
Figure
The company reported earnings of $4.10 per diluted share on revenue of $13.5 billion, operating earnings of $1.420 billion, and net earnings of $1.125 billion.
Source quote
“Earlier today, we reported earnings of $4.10 per diluted share on revenue of $13.5 billion, operating earnings of $1.420 billion and net earnings of $1.125 billion.”
-
Figure
Marine Systems grew by 26.4% due to improved operating performance across all shipyards and increased revenue.
Source quote
“Each of the segments demonstrated better performance led by Marine Systems with a 26.4% increase from improved operating performance across all of our shipyards coupled with the revenue increase.”
-
Figure
Operating earnings rose to $493 million, up $61 million from the previous quarter, due to increased revenue and a 70 basis point improvement in operating margin.
Source quote
“Operating earnings of $493 million are up $61 million driven in part by the increased revenue, but most importantly, by a 70 basis point improvement in operating margin.”
-
Figure
The total backlog reached $131 billion, an increase of 48% over last year and 11% over the previous quarter due to robust demand across the portfolio.
Source quote
“The robust demand across our portfolio resulted in total backlog of $131 billion, an impressive 48% increase over last year and 11% higher than just a quarter ago.”
-
Figure
The number of sequence critical material items received increased by 52% compared to the same period last year.
Source quote
“For sequence critical material, we have seen a 52% increase in the number of items received as compared to this time period last year.”
2 more
-
Guidance
GD expects to be in production next year, manufacturing artillery rounds for the customer for the foreseeable future.
-
Key theme
Demand for Combat Systems products is strong, driven primarily by U.S. allies.
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q1 2026. Ring: Q4 2025.
Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 86% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.
Sentences that drove the tone
“The operating margin for the entire company was 10.5%, a 10 basis point improvement over a year ago quarter, which coupled with the revenue growth, led to very strong earnings...”
“Each of the segments demonstrated better performance led by Marine Systems with a 26.4% increase from improved operating performance across all of our shipyards coupled with the revenue increase.”
“In addition, ordinance and tactical systems continue to lead this group's growth with particularly strong growth in munitions.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-04-05)
| Metric | Q1 2026period end 2026-04-05 | Q4 2025period end 2025-12-31 | Change | Q1 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 13.48B | 14.38B | −6.2% | 12.22B | +10.3% |
| Operating income | 1.42B | 1.45B | −2.2% | 1.27B | +12.0% |
| Net income | 1.12B | 1.14B | −1.6% | 994.0M | +13.2% |
| EPS | — | 15.45 | — | ||
| P/E today 22.9 | — | 21.8 | — | — | — |
Topics
Most discussed now
- Mission Systems had a strong quarter from an operational standpoint with a 50 basis point expansion in margins as compared...
- The operating margin for the entire company was 10.5%, a 10 basis point improvement over a year ago quarter, which...
- General Dynamics got out of the gate with its business units overwhelmingly exceeding their planned cash flow and driving operating…
- After considering capital expenditures, General Dynamics' free cash flow for the quarter was just shy of $2 billion, yielding a cash...
- General Dynamics sees durable productivity improvements on the G700 and 800 in both manufacturing and completions.
Faded since Q4 2025
- Dropped This combined with a robust order pipeline of close to $120 billion of qualified opportunities, certainly presents a healthy market...
- Dropped At Mission Systems, the transition from legacy programs is complete, allowing them to focus where they have deep...
- Fading In short, this group had a very solid year operationally with expanded margins, explosive order activity, and a strong order...
- Fading Combat saw robust order intake for the fourth quarter resulting in a book-to-bill of 4.3 to one.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
General Dynamics announced that Danny Deep will become Chief Executive Officer on January 1, 2027, succeeding Phebe N. Novakovic, who will transition to Executive Chairman.
- Director or officer change · SEC 8-K
General Dynamics elected Danny Deep to the board of directors, with the company reporting revenue of $52.6 billion in 2025.
- Other events · SEC 8-K
General Dynamics Corporation filed a prospectus supplement on August 4, 2026, regarding an offer to rescind the acquisition of up to 1,010,925 shares of common stock.
- Results of operations · SEC 8-K
General Dynamics reported its financial results for the quarter ended July 5, 2026, on July 29, 2026.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
General Dynamics reported its financial results for the quarter ended April 5, 2026, on April 29, 2026.
- Results of operations · SEC 8-K
General Dynamics announced its financial results for the quarter and year ended December 31, 2025, on January 28, 2026.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
-
full year
capital expenditure as a percentage of sales
Source quote
“While capital expenditures were around 1.5% of sales in the quarter, we continue to expect capital expenditure between 3.5% and 4% of sales for the full year.”
-
the year
free cash flow conversion rate of net income
Source quote
“We continue to expect a free cash flow conversion rate of 100% of net income for the year, but the strong cash acceleration into the first quarter results in a profile that will look a little different than what I provided in January.”
-
each of the remaining quarters
positive cash flow
Source quote
“We now expect the first quarter to represent the largest quarter of free cash flow with positive cash flow in each of the remaining quarters, supporting our continued efforts to drive cash to the left.”
-
June and August 2026
notes coming due
Source quote
“We have $500 million of notes coming due in both June and August 2026 for a total of $1 billion.”
-
this coming quarter
delivery of the 25th G800
Source quote
“In fact, we will deliver only our 25th G800 this coming quarter, so very positive, given how early we are in that progra”