General Dynamics beats Q2 estimates on profit and revenue, driven by strong marine business

General Dynamics' second-quarter profit and revenue topped analyst estimates on Wednesday, driven by robust orders in its marine segment from Columbia- and Virginia-class submarine programs, boosting shares five per cent in early trading.

The defense company's nuclear-powered submarine-making marine systems segment produced 22.2 per cent more revenue. The unit is now expected to generate 2025 revenue of $15.6 billion with a seven per cent margin.

During the quarter, the Pentagon modified a submarine production contract awarded to the company's marine segment, raising the value by $1.85 billion. The company entered into a new contract with union members at its submarine-making unit, averting a shortage of skilled labor that has contributed to delays in US Navy shipbuilding schedules.

The technologies segment, which makes products for a range of military, intelligence, federal civilian, and state customers, generated 5.5 per cent more revenue year-on-year.

Defense manufacturers benefited from strong demand for weapons and other military equipment during the quarter, owing to geopolitical uncertainty and ongoing conflicts in the Middle East.

New bookings during the quarter were 2.4 times its billing for General Dynamics' defense segments, indicating a strong order book.

However, revenue within the combat systems part of the defense business, which manufactures land combat vehicles, weapons systems, and munitions, edged down 0.2 per cent after taking a hit from the cancellation of the M10 Booker contract by the Pentagon as well as production delays owing to supply chain woes.

Annual revenue in the combat segment is forecast to be $9.2 billion with a 14.5 per cent margin.

The Reston, Virginia-based company's quarterly adjusted profit was $3.74 per share, compared with analysts' estimates of $3.53 per share, according to data compiled by LSEG.

It expects profit for the year to range between $15.05 and $15.15 per share.

General Dynamics' total quarterly revenue of $1.3 billion beat Wall Street analysts' estimate of $1.23 billion.

Total revenue for fiscal year 2025 is projected at $51.2 billion, with a 10.3 per cent operating margin.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Leroy Leo, Paul Simao, Rod Nickel)