April 29 (Reuters) – General Dynamics on Wednesday beat Wall Street estimates for first-quarter profit and revenue, driven by continued strength in its marine and aerospace segments, sending the company’s shares up 7% before the bell.
Quarterly revenue from the defense contractor’s marine systems segment rose 21% from a year ago on continued growth in productivity, as it recovers from supply chain disruptions and labor shortages.
The segment is expected to further benefit from U.S. President Donald Trump’s $1.5 trillion defense budget request for fiscal year 2027 which includes over $65 billion to procure 18 warships and 16 support ships made by General Dynamics and Huntington Ingalls Industries, as part of the Pentagon’s shipbuilding push.
In the aerospace segment, which makes Gulfstream business jets, revenue rose 8.4% as the unit continues to ramp up production through a supply chain recovery and aftermarket business strength holds up.
Quarterly deliveries rose to 38 aircraft, from last year’s 36. Delivery schedules in aerospace depend on certification outcomes.
Earlier this year, government documents seen by Reuters revealed Transport Canada’s certification of the Gulfstream’s flagship G700 and G800 aircraft, as well as the smaller, shorter-range G500 and G600 planes.
The certifications came after President Trump threatened action against Canada’s aircraft sector, saying the regulator was taking too long to certify the U.S.-made planes.
General Dynamics reported strong order activity, with quarterly bookings running at roughly twice the level of billings, boosting the defense contractor’s backlog.
The pickup in new contracts also lifted cash generation, with operating cash flow swinging to an inflow of $2.2 billion from an outflow of $148 million a year earlier, and free cash flow rebounding to nearly $2 billion from negative $290 million. The improvement was driven largely by a $764 million increase in customer advance payments.
Quarterly per-share profit rose 12% to $4.10, compared with analysts’ estimate of $3.68, according to data compiled by LSEG.
Total revenue rose 10.3% to $13.48 billion for the quarter ended April 5, compared with estimates of $12.71 billion.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)
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