Key financial results

  • General Dynamics reported third quarter 2026 earnings of $4.49 per diluted share on revenue of $14.57 billion.We reported earnings of $4.49 per diluted share on revenue of $14.57 billion
  • Operating earnings for the quarter were $1.527 billion and net earnings were $1.229 billion, representing a 14.7% and 16.1% increase respectively over the year-ago quarter.operating earnings of $1.527 billion and net earnings of $1.229 billion.
  • The company's operating margin for the entire company was 10.5%, representing a 20 basis point improvement over the year-ago quarter.The operating margin for the entire company is 10.5%, a 20 basis point improvement over the year-ago quarter

Business segment results

  • Aerospace: Aerospace revenue was $3.54 billion with operating earnings of $513 million and a 14.5% operating margin.Aerospace had a very good quarter with revenue of $3.54 billion and operating earnings of $513 million, with a 14.5% operating margin.
  • Combat Systems: Combat Systems revenue was $2.39 billion, up 6% over the year-ago quarter, with earnings of $330 million.Combat Systems had revenue of $2.39 billion, up 6% over the year-ago quarter.
  • Marine Systems: Marine Systems revenue growth of 21% was driven by Columbia and Virginia-class construction volumes.This year's quarter's revenue growth of 21% was driven by Columbia and Virginia-class construction volumes
  • Technologies: Technologies revenue of $3.7 billion represented an increase of 10.8% over the third quarter of 2025, with operating earnings of $346 million.Revenue of $3.7 billion represents an increase of 10.8% over the third quarter of 2025.

Capital allocation

  • Capital expenditures were $481 million in the quarter, bringing the first 9 months total to 2.2% of sales.Capital expenditures were $481 million in the quarter, more than the total amount in the first half of the year.
  • The company paid dividends of approximately $430 million and repurchased about $285 million of common stock to cover estimated dilution.we paid dividends of approximately $430 million and repurchased about 285 million of our common stock to cover estimated dilution.
  • Management contributed $500 million to the pension plans in the quarter to essentially fund frozen plans and derisk them.we contributed $500 million to our pension plans in the quarter.
  • The company repaid $500 million of notes that matured in August after previously repaying another $500 million in June.We repaid $500 million of notes that matured in August after previously repaying another 500 million notes in June.
  • Demand for Combat Systems products remains strong, primarily driven by U.S. allies and an increased threat environment.Demand for Combat Systems products is strong, primarily driven by U.S. allies.
  • Gulfstream saw sustained demand across the entire product line with new aircraft orders up over 30% in the first nine months of 2026.new aircraft orders in the first 9 months of 2026 were up over 30% from last year
  • Customers in the Middle East showed some cautious concern due to the geopolitical environment, leading them to be slow in providing orders.some cautious concern from customers in the Middle East. They are, however, still active in the pipeline, but slow to provide orders.

Competitive landscape

  • Management noted that the company is a subcontractor on a low single-digit percentage of missile framework agreements.We are not a huge part of those missile framework agreements. We're in the single digits, in the low single digits
  • General Dynamics welcomes new entrants into the supply chain for the submarine industrial base, such as Anduril.we welcome any new entrants into the supply chain for the submarine industrial base.

Macroeconomic environment

  • Net interest expense decreased due to higher cash balances throughout 2026, avoiding commercial paper borrowing costs incurred in 2025.
  • The effective tax rate in the quarter was 17.3%, bringing the tax rate for the first 9 months of 2026 to 17.6%.the effective tax rate in the quarter was 17.3%, bringing the tax rate for the first 9 months of 2026 to 17.6%.

Growth opportunities and strategies

  • Gulfstream's intent is to deliver 200 aircraft in 2030, which requires producing more than 200 aircraft in 2029.our intent is to deliver 200 aircraft in 2030.
  • Electric Boat is focused on delivering the first Columbia and first Virginia VPM ships by the end of 2028.We continue to be hyper-focused on delivering the first Columbia and first Virginia VPM ships by the end of 2028.
  • Ordnance and Tactical Systems is investing in solid rocket motor capability to support Lockheed Martin with production expected in 2028.we're investing in solid rocket motor capability to support Lockheed Martin in this instance.

Financial guidance and outlook

  • Management increased the full-year 2026 EPS forecast to between $17.20 and $17.30 per diluted share.we once again increased our forecast to between $17.20 to $17.30 per diluted share
  • The updated guidance contemplates revenue between $56.5 billion and $56.8 billion and an operating margin around 10.5%.This contemplates revenue between $56.5 billion to $56.8 billion and operating margin around 10.5%.
  • Full-year capital expenditures are expected to remain between 3.5% and 4% of sales.We continue to expect capital expenditures between 3.5% and 4% of sales for the full year.
  • Full-year net interest expense is expected to be approximately $215 million.At this point, our expectation for net interest expense for the year is approximately $215 million.
  • Full-year free cash flow conversion is expected to be around 105%.We continue to expect free cash flow conversion at around 105% for the year

Q3 2026 results

MetricResultChange
Revenue$14.57 billionUp 12.9%
Diluted earnings per share$4.49 per shareUp 15.7%
Operating earnings$1.527 billionUp 14.7%
Net earnings$1.229 billionUp 16.1%
Operating margin10.5%20 basis point improvement
Backlog$220 billionDoubling the level of a year ago

How management sounded

Positive (+45 on our -100 to +100 scale). Management highlighted splendid results, record backlog, and raised full-year guidance, reflecting very strong operational performance and demand. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.

Read the analyst Q&A summary and guidance and outlook for this call.

What to watch before the next call

  • The pace of capital projects and capital expenditures in the fourth quarter.
  • Supply chain performance supporting Gulfstream production ramp toward 200 aircraft deliveries.
  • Progress on submarine throughput and execution on the first Columbia and first Virginia VPM ships by the end of 2028.

Earlier calls

  • Q2 2026 (Jul 29, 2026), tone Balanced: General Dynamics reported second quarter 2026 revenue of $14.1 billion and earnings of $4.24 per diluted share, driven by strong performance in Aerospace and Marine Systems.