GD earnings analysis
What we found in GD's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
General Dynamics delivered a strong Q2, with revenue of $14.094 billion up 8.1% year over year, EPS of $4.24, and operating margin expanding to 10.4%. Aerospace and Marine Systems supplied the principal growth and margin contribution, while Combat Systems profitability softened on program mix and lower U.S. vehicle demand. Liquidity strengthened materially, as six-month free cash flow reached $3.598 billion and backlog rose to $136.498 billion; segment-level 2026 outlooks remain constructive.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and EPS accelerated
- Q2 revenue was $14.094 billion, up $1.053 billion (8.1%) year over year and up $614 million (4.6%) from Q1 2026 revenue of $13.480 billion. Diluted EPS was $4.24, up $0.50 from $3.74 a year earlier and $0.14 from $4.10 in Q1.
- Year-over-year margin expansion
- Operating earnings rose $155 million (11.9%) to $1.460 billion, lifting operating margin 40 basis points year over year to 10.4%. Margin was down 10 basis points sequentially from 10.5% in Q1 2026.
- Aerospace led growth and margin gains
- Aerospace revenue increased $463 million (15.1%) to $3.525 billion and operating earnings rose $107 million (26.6%) to $510 million. Gulfstream deliveries increased by 3 aircraft to 41, while segment margin expanded 130 basis points to 14.5%.
- Marine growth supported by submarine work
- Marine Systems revenue grew $440 million (10.4%) to $4.660 billion, driven by $281 million of higher Navy ship-construction revenue and $159 million of higher ship-services revenue. Segment margin improved 40 basis points to 7.3%.
- Working-capital release drove cash flow
- Six-month operating cash flow was $4.035 billion versus $1.450 billion a year earlier, producing $3.598 billion of free cash flow after $437 million of capital expenditures. Cash and equivalents ended at $4.3 billion, up from $2.3 billion at year-end 2025.
- Backlog builds across defense and aerospace
- Total backlog increased $5.658 billion sequentially to $136.498 billion, including $65.182 billion in Marine Systems and $29.350 billion in Combat Systems. Aerospace posted a 1.5-to-1 Q2 book-to-bill ratio.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Combat Systems mix pressured profit
- Combat Systems was essentially flat: Q2 revenue increased only $7 million (0.3%) to $2.290 billion, while operating earnings declined $6 million (1.9%) to $318 million and margin fell 30 basis points to 13.9%. Management cited lower U.S. military-vehicle revenue of $126 million, reflecting Army recapitalization efforts and the M10 Booker termination.
- Rising capex and near-term debt maturity
- Capital expenditures rose 29% year over year to $437 million in the first six months and management expects spending to increase further in the second half. The company also plans to repay $500 million of fixed-rate notes maturing in August 2026 using cash on hand, subject to ongoing monitoring of market conditions and borrowing needs.
- 401(k) registration remediation
- The company identified up to approximately 300,000 unregistered shares sold through certain 401(k) plans and intends to make a rescission offer covering purchases from July 1, 2025 through June 30, 2026. Management does not expect a material financial impact, but the matter creates execution and potential participant-claim exposure.
- No formal risk-factor update; supply risk remains
- Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. Nonetheless, management noted supply-chain delays at an Israel-based mid-cabin airframe supplier and cited conflicts in the Middle East as the cause.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.24
- Operating margin
- 10.4%
- Segment
- Aerospace: revenue $3.525 billion, up $463 million (15.1%) year over year; operating margin 14.5% versus 13.2%.
- Segment
- Marine Systems: revenue $4.660 billion, up $440 million (10.4%); operating margin 7.3% versus 6.9%.
- Segment
- Combat Systems: revenue $2.290 billion, up $7 million (0.3%); operating margin 13.9% versus 14.2%.
- Segment
- Technologies: revenue $3.619 billion, up $143 million (4.1%); operating margin 9.4% versus 9.6%.
What they said about what is next.
The 10-Q provides segment outlook rather than consolidated revenue/EPS guidance: 2026 Aerospace revenue approximately $13.8 billion and 14.7% margin; Marine Systems approximately $18.0 billion and 7.4%; Combat Systems approximately $9.8 billion and 13.8%; Technologies approximately $14.1 billion and 9.4%.
The filing reads better than the one before it.
What came before.
- 10-Q · April 29, 2026
- General Dynamics reported strong Q1 2026 results with revenue of $13.5 billion, up 10.3% from $12.2 billion in Q1 2025, and EPS of $4.10, surpassing the estimated $3.69. Improvements were observed across all segments,…
- 10-K · January 30, 2026
- General Dynamics reports continued multi-year revenue growth driven by Aerospace and Marine Systems, with Q4 2025 revenue of $14,379,000,000 and diluted EPS of $4.16 for the quarter. The company highlights substantial…
- 10-Q · July 23, 2025
- General Dynamics reported Q2 revenue of $13,041 million (up $1,065 million, +8.9% YoY) and diluted EPS of $3.74 (up $0.48, +14.7% YoY). Operating earnings rose to $1,305 million (vs. $1,156 million a year ago) and…
- 10-Q · April 23, 2025
- General Dynamics reported Q1 revenue of $12,223 million (+$1,492 million vs. prior-year quarter) and diluted EPS of $3.66 (vs. $2.88 a year earlier), driven by higher Aerospace and Technologies revenue and improved…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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