General Dynamics Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component General Dynamics (NYSE:GD) will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. General Dynamics offers products and services in business aviation, combat vehicles, weapons systems and munitions as well as information systems, technologies and services.

General Dynamics Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.92 per share, a decline of 4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.98. Between one and three months ago, the average estimate moved down. It also has dropped from $1.95 during the last month. For the year, analysts are projecting profit of $6.97 per share, a decline of 4.3% from last year.

Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the third quarter, the company reported net income of $1.70 per share versus a mean estimate of profit of $1.77 per share. In the second quarter, the company beat estimates by 3 cents.

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Stock Price Performance: Between November 16, 2012 and January 16, 2013, the stock price had risen $7.64 (12.3%), from $62.16 to $69.80. The stock price saw one of its best stretches over the last year between October 10, 2012 and October 18, 2012, when shares rose for seven straight days, increasing 5.2% (+$3.42) over that span. It saw one of its worst periods between May 10, 2012 and May 18, 2012 when shares fell for seven straight days, dropping 4.8% (-$3.20) over that span.

A Look Back: In the third quarter, profit fell 8% to $600 million ($1.70 a share) from $652 million ($1.80 a share) the year earlier, missing analyst expectations. Revenue rose 1% to $7.93 billion from $7.85 billion.

Here’s how General Dynamics traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

GD

Wall St. Revenue Expectations: On average, analysts predict $8.8 billion in revenue this quarter, a decline of 3.8% from the year-ago quarter. Analysts are forecasting total revenue of $32.23 billion for the year, a decline of 1.4% from last year’s revenue of $32.68 billion.

Key Stats:

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 0.5% in the second quarter before climbing again in the third quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 9.2% over the past four quarters.

Analyst Ratings: With 11 analysts rating the stock a buy, one rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.28 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.27 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 0.4% to $15.59 billion while liabilities rose by 0.1% to $12.19 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)