Company Reports

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t usually see room for outsize growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of geopolitical danger. In the US, both have been on the rise, and among many allies, notably NATO and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized, while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization and robust demand from the Trump administration in the near term but should moderate to around 2.5%-3.0% growth over the long term.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t usually see room for outsize growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of geopolitical danger. In the US, both have been on the rise, and among many allies, notably NATO and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization and robust demand from the Trump administration in the near term but should moderate to around 2.5%-3.0% growth over the long term.

General Dynamics' second-quarter revenue grew 8.1% to $14.1 billion, while operating profit again rose 12% to $1.46 billion since the year-ago quarter. Continuing the trend from late in 2025, brisk jet deliveries and submarine construction progress drove revenue and margin growth.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t usually see room for outsize growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of geopolitical danger. In the US, both have been on the rise, and among many allies, notably NATO and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization and robust demand from the Trump administration in the near term but should moderate to around 2.5%-3.0% growth over the long term.

General Dynamics' first-quarter revenue grew 10.3% to $13.5 billion, while operating profit rose 12% to $1.4 billion since the year-ago quarter. Continuing the trend from late in 2025, brisk jet deliveries and submarine construction progress drove revenue and margin growth.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t usually see room for outsize growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of geopolitical danger. In the US, both have been on the rise, and among many allies, notably NATO and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization and robust demand from the Trump administration in the near term but should moderate to around 2.5%-3.0% growth over the long term.

On Feb. 28, the US and Israel led widespread military strikes on Iran and signaled that the operation could last weeks. Iran retaliated, with consequences across the region and in the oil market. In premarket trading on March 2, most US defense contractors' stocks rose several percentage points.

Investors traded shares of business jet maker Bombardier down around 7% on Jan. 30, likely in response to news that the US government may be ordered to prevent or withdraw certification of its jets.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t usually see room for outsize growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of geopolitical danger. In the US, both have been on the rise, and among many allies, notably NATO and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization and robust demand from the Trump administration in the near term but should moderate to around 2.5%-3.0% growth over the long term.

General Dynamics annual revenue grew 10.1% in 2025 to $52.5 billion, while operating profit rose 11.7% to $5.4 billion. Brisk jet deliveries and submarine construction progress boosted revenue growth. Backlogs in every segment grew considerably in the third and fourth quarters.

In early trading on Jan. 8, after President Donald Trump declared he would seek a $1.5 trillion fiscal 2027 defense budget, shares of US defense contractors appreciated by as much as 5%.

In afternoon trading on Jan. 7, after reports that President Trump had suggested he would prohibit US defense contractors' dividends and stock repurchases, shares of US defense contractors declined by as much as 5%.

Revenue grew 10.6% year over year to $12.9 billion, while operating profit rose 12.7% to $1.3 billion. Brisk jet deliveries and submarine construction progress boosted revenue growth, while the order backlogs in every segment grew considerably in the quarter.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t usually see room for outsize growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of geopolitical danger. In the US, both have been on the rise, and among many allies, notably NATO and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization in the near term but will moderate to around 2.5%-3.0% growth over the next five years.

In afternoon trading on Oct. 15, after reports of a comment by US Treasury Secretary Scott Bessent about US defense contractors' stock repurchases at the "Invest in America Forum" hosted by CNBC, shares in the sector traded downward between around 1% and 3%.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t see substantial growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of danger. In the US, both have been on the rise, and among many allies, notably Germany and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization in the near term but will moderate to around 2.5%-3.0% growth over the next five years.

Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t see substantial growth in this industry. Defense budgets usually ebb and flow with a nation's wealth and its perception of danger. In the US, both have been on the rise, and among many allies, notably Germany and Japan, geopolitics is leading to larger military budgets than we've seen for decades. We estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2011-16 by 3.7% annualized while these budgets grew between 2017-24 by 5.8% annualized. We think the contractors' budget will continue to grow with modernization in the near term but will moderate to around 2.5%-3.0% growth over the next five years.

Revenue grew 9% year over year to $13 billion, while operating profit rose 13% to $1.3 billion. Submarine construction and timing, in particular, boosted revenue growth, with marine top line up 22%. Deliveries of G700 business jets drove 26% growth in aerospace operating profit to $400 million.

Early on June 22 local time, the US deployed long-range bombers and missiles to strike Iran's underground nuclear enrichment and armament sites. Shares of US defense firms were mostly flat in premarket trading on June 23.

On June 13, Israel launched a series of strikes against Iranian facilities and personnel targeting its nuclear enrichment and armament programs. Shares of global defense contractors appreciated as much as 4% in early trading in reaction to the news.