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What’s General Dynamics’ outlook for 4Q14?

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Outlook for 4Q14

General Dynamics (GD) expects strong order intake in the Aerospace segment due to the introduction of two new aircraft in 4Q14. The overall slack in the defense sector due to budget cuts would have an impact on the revenue. However, the company hopes to efficiently manage its cost of revenue. It wants to continue to post higher earnings and better cash flows in the fourth quarter.

You can read Why are US defense expenditures falling? to learn more about the defense sector’s budget cuts.

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Earnings estimates 4Q14

For 4Q14, analysts expect General Dynamics to clock sales of $8,076 million with an EBITDA (earnings before interest, tax, depreciation, and amortization) of $1,187 million. It’s expected to report operating profit at $1,046 million with a net income of $710 million. For 4Q14, it’s earnings per share, or EPS, is expected to be $2.129.

Outlook for fiscal year 2014

General Dynamics also raised its EPS guidance for 2014 from $7.60 to $7.70. It’s up about $0.25 from the earlier forecasts. This comes with an expectation of higher operating margins from three of the company’s four divisions. It also comes with a low tax rate.

Earnings estimates for fiscal year 2014

For the full-year 2014, analysts expect General Dynamics to generate sales of $30,582.3 million. Its net income is expected to come in at $2,635.13 million. It’s expected to report EPS of $7.80 for fiscal year 2014.

General Dynamics is part of the MSCI Industrials Index ETF (FIDU). This ETF also includes General Electric (GE), Union Pacific (UNP), and 3M Company (MMM).

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