General Dynamics Corporation (NYSE:GD) reported first-quarter 2026 results on Wednesday, with revenue rising 10.3% year over year.

Revenue reached $13.5 billion, exceeding analyst estimates of $12.7 billion.

Diluted EPS of $4.10 increased 12% from the prior year and beat analyst estimates of $3.68. Shares were trading higher following the results. Operating earnings rose 12% to $1.4 billion, with an operating margin of 10.5%.

Net earnings increased 13.2% to $1.125 billion, while earnings before income tax grew 14.1%. Net interest expense improved to $69 million from $89 million a year earlier.

Segment Performance

Aerospace revenue increased 8.4% to $3.28 billion, with operating earnings up 14.1% to $493 million and margin expanding to 15.0% from 14.3%.

Gulfstream aircraft deliveries rose to 38 units from 36 units, while orders increased to $3.84 billion from $2.36 billion.

Marine Systems revenue rose 21.0% to $4.34 billion, with operating earnings increasing 26.4% to $316 million and margin improving to 7.3% from 7.0%.

Combat Systems revenue grew 4.9% to $2.28 billion, with operating earnings up 6.5% to $310 million and margin at 13.6% versus 13.4%.

Technologies revenue increased 4.2% to $3.58 billion, while operating earnings rose 3.4% to $339 million and margin slightly declined to 9.5% from 9.6%.

The company said it is positioned to drive additional performance through the year, citing strong order activity, improved cash generation, and reduced leverage. No tariffs, macroeconomic headwinds, regulatory changes or one-time impacts were disclosed in the release.

Cash Flow, Balance Sheet And Capital Deployment

Operating cash flow totaled $2.2 billion, representing 192% of net earnings, compared with a negative $148 million in the prior-year period. Free cash flow was $1.95 billion versus negative $290 million a year ago.

The company ended the quarter with $3.7 billion in cash and equivalents, up from $2.3 billion at year-end. Total debt was approximately $8.0 billion, with net debt declining to $4.36 billion from $5.68 billion at year-end.

Capital deployment included $405 million in dividends, $217 million in share repurchases, and $203 million in capital expenditures.

Orders, Backlog And Demand Trends

Orders totaled $26.6 billion, resulting in a companywide book-to-bill ratio of 2-to-1. Defense segments posted a 2.2-to-1 book-to-bill ratio, while Aerospace recorded a 1.2-to-1 ratio, improving from 0.8x a year earlier.

Total estimated contract value rose to $188.4 billion from $178.9 billion at year-end, including backlog of $130.8 billion.

Conference Call Highlights

President Danny Deep said the quarter "exceeded our own expectations" and described it as "a very powerful quarter in all respects."

General Dynamics raised its 2026 EPS guidance to $16.45–$16.55 from $16.10–$16.20 following a stronger-than-expected first quarter.

The company expects second-quarter performance to be in line with the first, with results building in the second half and peaking in the fourth quarter on mix and margin strength.

GD Price Action: General Dynamics shares were up 9.39% at $343.15 at the time of publication on Wednesday, according to Benzinga Pro data.

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