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  • Professor Andrea M. Armani, University of Southern California
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  • Professor Stefan Witte, Delft University of Technology

Why General Dynamics (GD) Stock Is Up Today

GD Cover Image

What Happened?

Shares of aerospace and defense company General Dynamics (NYSE: GD) jumped 6.6% in the afternoon session after the company reported strong second-quarter financial results that surpassed Wall Street expectations. 

General Dynamics announced second-quarter revenue of $13.04 billion, an increase of 8.9% from the year-ago period, which topped analysts' forecasts. The company also reported diluted earnings per share of $3.74, a 14.7% jump from the prior year and ahead of the consensus estimate of $3.59 per share. The strong performance was driven by growth across its business segments, with particularly robust order activity in its Marine and Aerospace divisions. The company's consolidated book-to-bill ratio, a key indicator of future demand calculated by dividing orders by revenue, was a very strong 2.2-to-1 for the quarter. This robust order intake helped push the company's total backlog to $103.7 billion, signaling a healthy pipeline of future business.

Is now the time to buy General Dynamics? Access our full analysis report here, it’s free.

What Is The Market Telling Us

General Dynamics’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

General Dynamics is up 21.1% since the beginning of the year, and at $316.06 per share, has set a new 52-week high. Investors who bought $1,000 worth of General Dynamics’s shares 5 years ago would now be looking at an investment worth $2,092.

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