General Dynamics (GD) 24 Apr 192019 Q1 Earnings call transcript

Good morning, everyone. And welcome to the General Dynamics' First Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please also note today's event is being recorded. At this time, I would now like to turn the conference over to Howard Rubel, Vice President of Investor Relations. ahead. go Please

These and Dynamics' Jamie, statements everyone. to company’s Welcome today risks to Thank uncertainties. and quarter good XXXX General outlook. the regarding first our forward-looking are conference the subject represent some you, estimates morning, estimates call. made Any

information factors Chief over call in to Chairman and is Additional Officer, the XX-Q Phebe and the XX-K regarding to that, With turn these Executive Novakovic. filings. it’s contained company’s my pleasure our

we without and reported shy and up of large up $X.X slightly good diluted an CSRA morning XXXX and Howard XX% billion. of was purely of first today the impressive share due X.X% Revenue Earlier on part quarter basis. Thanks per earnings acquisition in the all. a earnings $XXX net of income billion $X.XX revenue However, revenue million. of over to just organic was $X against CSRA Operating of

organic did that million Higher of was ahead of of order the the earnings billion XX.X% per from $X.XX in was declines up of of X% of systems. five million somewhat million share backlog year-ago was last The $XX.X of side compare that GDIT. operating continuing quarter margin slightly backlog. the cause in $XX last with were all amortization not The it revenue billion than taxes story favorably first were intake interest were revenue some across $X.XX were result first combination there marine the the and lower over $X earnings quarter was Total operating just It XXXX, and a same the an result quarter from modest benefited earnings it XX.X% of - appear to aerospace, down important higher. CSRA end year's part despite the about consensus, from inclusion at combat of stellar and follows good, XXXX. CSRA quarter by the anticipated income. was fact, than higher grew $X.XX Operating In quarter would growth EPS sell $XXX drop. $X.XX segments. transaction. the net increase growth, were in operating compared was revenue expense, of from of the an earnings growth the the Apart higher operations to in before below impressive Net over $XX which year. better billion,

X.X for was for Excluding impressive the X impact book-to-bill of for X.X aerospace. X.X. to the defense exchange, to and an the company down X into foreign Broken

each group let color where So me discuss appropriate. and provide some

increase the planes The billion solid is delivery we as burden somewhat the on will First, mix XXXX. to margin shift than the service the be had fractionally aerospace. quarters markedly a rate million, in better XX.X%, first year. the ago two mid in indicated These XX.X% was previously improve the final attributable Aerospace the Margins the from the and year-end, XX.X% the delivery period GXXX. revenue earnings GXXX Gulfstream aircraft aerospace indication. related moderately up the program This quarter range, the through that of at of ahead the or and retrofits of At in of the test operating of lower large XX% year for $XXX seven the $X.X that margins we in part advised. would from At was of revenue. carry were period. in to

particularly continue the the margins margins been margins pre-owned from so profile on year. to of overall to cost second about and in points Excluding delivery XX sales, the improve impact would on Based basis we better. adverse have our improvement, half expect

Gulfstream The at expanded book-to-bill the XXX front, and backlog activity backlog. dollar order better. GXXX GXXX book-to-bill the grew was We quarter aerospace also even was very The the good. was and in for denominated. On the X.X:X the

book-to-bill was months, to trailing X. XX the about For X.X aerospace

can release. We information predict of the is early You see and certified anticipate June, the the we will quarter half. GXXX given expect this process. orders J will remain be timing late press rigorous more the on but deliveries deliveries in for XXX at track Nonetheless, review difficult next exhibit the second to the FAA certification quarter's or on

this items producing is issue While quarter and you are from very Nacelle XXX increasingly of control quarter. quality. and good deliveries of our an the deliver to XXX on deliveries the the as and becoming can GXXX the for last pacing discern is ability costs under fourth less the are in nacelle, we

We behind by us mid-year. expect schedule all issues to be

set range customers the our importance. further earlier the plug, but by is longest record and the its considerably weeks interesting speed just GXXX vital in XX a nautical So flown by ever aircraft. distance X,XXX shattered competitor's knowledge and think the XX competitor's approximately commercial demonstrating that and speed range The this forgive beating It record business flight of the aircraft from that the also for of performance. earlier month less a This few averaging Mach aviation flew is miles minutes. traveled at unrivaled time. this any in than aircraft interest is the XXX who This X.XX, minutes, during GXXX that particular a miles aircraft is that hours me Singapore to to Tucson by nautical to XX range

year $X.X revenue the Combat of ago above combat. was quarter. XX.X% Next billion

other operating new also timing. results. program. a factor Abrams volumes Stryker up program firepower earnings of but mobile XX.X%. the and strong ascribe with was and we other down, On delivered of $XX were in a growth margin ramp to the growth. large protective declined the was There hand, an million that operating behind Mix Munitions

Stryker in will item, Absent The disposition $X.X have one-time to the planning issues production our our and the quarter for investments. of SEP this capabilities operating first the good first have exception. the the additional over one-time legal in a would of also the year charge grew took vehicle vehicles that in in the $X.X weapons quarter the a by received. our see Stryker closeout that quarter related on lumpy, earnings are very quarter continuous billion is no followed of received a the note, us segment slowest for process dispute European in Army and working funding methodology. international Tank. improvement fourth in and slowed countries, QX received segment the in generation was Backlog lease cash diplomatic the onto this the program operating up the with are the this We to in to of resolved production sight seeing is this corresponding approximately and one a highest order a two added orders reduction billion for we gives quarter that next The resolved. in activity of year-over-year. Canada integrating line orders and Army of leverages backlog been Once Battle to our continues the the vX, we between Abrams platform in new increase the being former on Integration the systems find of flexible traditionally vehicle. capital site. Main the Of

its ensures that affordably. the intimate and knowledge reliably receives the of Army Our platform programs

its Ordnance munitions to We ordinance and businesses Tactical stockpiles. refreshes ammo also the the Army continue and to see as opportunities expand

and throughout significant well as continue region. international We the opportunities have Europe, Pacific to NATO Eastern as

were operating Systems. with quarter. the revenues at our Marine ago Next, $XXX and down year billion $X X.X% $X.X up against was margins million Operating Marine of slightly for earnings were year guidance the of million X.X%.

are of We ahead target. modestly

detailed and Virginia-class with the XX of XX% construction another ship the the XX% in complete construction. XXth to With program with the design we delivered are respect and drawn. stages have nearly of various We have Columbia, complete design

XX% for of We design at complete the will start far of warships. in be any construction, metrics class historical completion at excess of

prepare ballistic-missile invest associated the Electric begin we long-lead the in begun customer material construction Virginia demand shipyards, of and year. with program In for significant of particular of Columbia submarine. and Columbia the on our the have all construction V production three at higher Block from increase our will emphasis late across new continue Navy next in ship with to response Boat first to We of yards our the to each full

$XXX recall, double the and acquiring As infrastructure million, the for significant to to the transport represent modules increase final by than CapEx Marine in point manufacturing for Groton the V Columbia may performance Systems size a year. Block larger different Quonset test. assembly logistics more in you from for was both, and depreciation its and additional XXXX at and waterfront capacity

they seek expect we their to it command segment For increase Marine our of fleet. size to poised the XXXX, our of the budget, that half we Navy capital share support our customers largest the are again entire Suffice CapEx. about say of to to

Next Information Technology.

which QX X.X%. down and to replaced revenue down the generated IT earnings remaining mature call $X comparisons the centers QX, is the the million sequentially, of over of mix, Margin million than an $XXX divestiture up wind is operating of but several margin new did quarter is bit billion and quarter, to program. but is over $XXX X.X% the XXXX. of QX of XXXX by by half about are than of year-ago numbers with to first not Since CSRA, quarter not ramp programs include better attributable For up a Revenue due the of meaningful. the lower $X.X for billion the the of $X.X of and operating billion, is

taxes it business in at in in and as results. our If bit it these industry. would approximately the is The we a the our its XX.X% segment, local year. the XX has This were operating case for category If and to state integration plan margin, basis carried below most results. you of competitors taxes gone put line EBITDA points this the in in the look last including place well for the best-in-class ahead places is add

our with of are building and legacy a X it business two X is to for competitive quarter and GDIT's growing our forward. shareholders. positioned companies the enterprise book-to-bill the and for over four going We trailing the the for growth create best taking was quarters, and the scale is X. value to the This resources and to customers for X.X highly is

$XXX helicopter a DISA network simulation for from portfolio. at programs Fort included support contract infrastructure, and million quarter the Rucker, The some notable wins additional wins, across $XXX million a classified for and to first $XXX of myriad several million training Pentagon

million basis rose compared operating X two last the year the year for $XXX with book-for-Bill to quarter years. mix. higher Book-to-bill earnings of was X while operating margins in last X quarter a ago than Mission decrement Finally following quarter, revenue each Systems, of X.X% for point were first $X million by times, solely of the for for XX attributable to to this the

the quarter and quarter. $X.X billion, and ended we the programs. with broad year with see, the level with a prior strong. can was quarter Ground their many space was backlog based you across As Army particularly systems of activity essentially ago naval of Demand

So in at Orders quarter $XX.X off across a my view, operational start and good revenue us The we're the to story growth. year. provide visibility. was in with businesses about the backlog first billion our good to

Our very ongoing good to focus results. deliver opportunity on provides productivity the

be begin to similar EPS performance we we quarter, from As perspective. an quarter the this to expect first second quarter our very

are full our at during recall say the mid our the may you mid-year Suffice as not guidance at at expectations bit which point do upon we our a give we to of first practice the based. practice plan it is quarter. to operating that year. the You ahead It end of guidance was change -- a of that review

As our continue our improve consolidate to improvement to to strive always, will we results. work and

questions. over additional Jason this for turn take to your commentary and me Let then

good international issued the of finance due to anticipated in million also Phebe was and vehicle debt expense acquisition CSRA. you. due we first the on payments large interest XXXX. the $XXX Canada. The in versus the to XXXX We're commercial of Net our programs Thank quarter delayed carrying million more increase in of morning. than $XX quarter in paper is to one

timing previously, discussed cash delays $XXX million free negative is payment a impacted Our item. the and as of was this we've flow by

significant in up we were our We balance repurchase enough XX% the no to on anticipate this horizon. employee million and to acquire to $XX quarter, the paid quarter we as On plan from the deploying of is invest the the year from ensure growth in this capital capital quarter options. $XXX the front, the Otherwise, support on of the on million shares and XXX,XXX that shares. with our deployment $XXX in expenditures shipyards year of stock $XX.X of we quarter about there still X% XXXX exercise ago million thereafter. returning We of and the range be the in balance dividends X% of we dilution We million balance expect position revenues the flow net a $XXX billion. pay our to cash approximately at our In peak spent to the the of cash to free debt sheet ended down short-term of borrowings. a year is

XX.X% effective rate the Our consistent full which year was for with tax rate is tax guidance. our quarter,

relevant We were associated most and book-to-bill backlog five of of companies report quarter, with to bears year grew otherwise our quarter our recorded As on which or This impact accounting asset. particularly organically. potential our under and X book-to-bill had on in strong lease the in a X X% There posted the Phebe flows. it reported the almost standard visible and $XX.X think with total Systems IDIQ the billion the over $X.X to conservative even as XX% not XXXX with total creates on noted, up is with over with I'd contracts. basis. same GAAP more up over prospective X, note, corresponding on activity Accepted January four I that firm finished has a the change a of XX% of and but contract billion, XX% We backlog in like the for X greater, assets that's as adopted of time earnings leases or one this year along $XXX greater, all a the of liability effective each to or ago. book-to-bill almost even this we X in based billion, a GDIT, reminder as consistent Mission year-end That's we operating item our backlog ago. options no Principles order under Generally We course the of calculate a a measure on segments On a basis. that contracts IDIQ to definition. value a value Accounting this balance cash up of net final liabilities year new highlight, sheet, excluding other story including year-end The

to it over you my that I'll Now, remarks. the turn concludes back for Q&A.

Thank you, Jason.

remind the ask participants that one how participants, to As you one to ask so a question we reminder, to participate. chance has everyone enter and a follow-up queue. Jamie, would please

Harned with first comes Instructions] Our Bernstein. question. today from ahead [Operator question Doug from Please your go

lower if morning, are thanks. that in out higher of understanding Could we trajectory margins sense the those beyond sort Gulfstream, I the Hi, about get the when last a on beginning that QX. year little of at good to trajectory end get the a this forward very you the better what's of margins give expect of to -- Yes, wanted year? to normal at the you and those we us and going might year? the behind Are margins attractive margin before you margins talked quarter likely

remarks, into that going my which the is the service will it, deliver we've in to we've in about our in increased lot, margin first as and margin deliveries through look, We'll mix I good the talked carry And we're more GXXXs be frequently, mix and ways quarter. but pretty, by attributable work enter about said on to quite second we through the largely the the this I been that fairly lower as with think GXXXs accounting change GXXX, margin. And in driven as mix. rate is transparent that all

the year performance go better. our better get we will when next into think our and I margins it, even and will improve So about throughout as year

to full-rate As we our come yet hit curves. learning GXXX and down continue GXXX the and on production --

then GXXX in for it mature possible might GXXX get GXXX were between margins? there to out think give mature you is mature, how the when you And a shakeout? are of the GXXX and us and the GXXX margins sense GXXX Where and that about

that the purpose-built to and are time our processes. built you over manufacturing the come They But surpass GXXX going line to to margins. peak is that we GXXX nothing's Well, GXXX our the facilities continued the and that it and expectation and have down, that straight I are coming GXXX, think all close understand. for reasons perfect GXXX

when I So are we're running. -- we really up, really,

going be legacy we're two think those than better to I airplanes.

with from Please from question Robert question. ahead Our next comes go Stallard your Research. Vertical

so Thanks Phebe, much. Good to off morning. start just with Aerospace.

You the ease gradually noted GXXX going deliveries Are for with plan your over to demand the in time? quarter. stick to good the you still GXXX

Yes.

this year, are as then margins. more I in good with GXXXs next following say, bit year a when So GXXXs -- little and full-rate and the in and production year

book-to-bill on to quarter. book-to-bill do follow-up good you Okay. think the what's And as time? a over that And you GDIT, of sustainable a this the conversion How is? then noted in revenues expected

sure bit Well, let it. it's into pretty something revenue. in when of put you backlog, to give me firm But we little conversion a context

it helps understand. think I to

So GDIT to they X mentioned at in quarters to book-to-bill my quarter and in over the X four I X. as add the remarks last X.X

their a rate Against consecutively quarters they over indicator, you've last four rate, between Now got XX%. win is X%. by performance and growing Dow's XX% have win demonstrated budget a those that

this So, stead business growth. good continued in is I very for think

Bank question next your Please Ronald go question. Merrill Epstein America ahead from from Our with of Lynch. comes

how Systems? you I it? that was pretty morning. right. you are Do sell think excuse question. mean, a right grow seems a performance Right. about you about What when like now, me, I you strategic it? bigger think bigger, or the Hey. Do about good. growing in do Maybe it, Good do you mean, How their Mission it you do thinking it's And quarter it? sub-scale with

sub-scale. it's that believe don't I portfolio, its given So,

and are a franchise about products a you significant some think programs, them integrators They've business. programs got are is, long-term with what number are growing. of If those they they systems really

in got environment, fact, GPS are, in number cyber class the a systems of where they've and on system. security, and areas, they fire in protection, submarines of I control integration unique So positioning, some the navigation best-of-class like accuracy network in position, position missile ballistic a

a So they've are of are which had growth they for that These programs time, on long all assist something. long, trajectories. the

So, their don't nice. sub-scale. company. good is I again, a quite really as This operating really them leverage margins are And see

I the with quite therein, in space comfortable think nicely this. they and we're play

say then GXXX? And just Can delivery follow-on great. in Aerospace. you the Okay, next slot is maybe available one for when

that into new tracking whole getting Yes, got I'm coming on. airplanes lot really We've not so we're that a not anymore, way. of it

metrics less about little you have and and we really are unique now that, those need sheet, anybody become that family when brand a think consistent and I individual but meaningful, So family Gulfstream to our has what's compelling, they than new about seeing you as airplanes is that we're scratch unusual brand what all portfolio, in the means, clean of nobody new, from and say else new, better demand. know all that that

Our George go question. next Shapiro question your comes ahead from Research. Please with from Shapiro

Yes, good morning.

Phebe, the second here? trend On Gulfstream, quarter in orders the continue are the were for we seeing strong

It's a think you address folly I data. So a help about the little little long but kind question more a It's too demand think myopic bit to robust more of -- a retrospective to easier a view, as point as start, take try -- good demand bit is about really this And this, to from prospectively. we're one's opportunity not your to raise holistically. off think like of I undergirding undergirding demand question. I'll us

X.X for period quarter the almost been That at us? tell data has The and up a Gulfstream the the in months X.X book-to-bill good Gulfstream at does ramped deliveries. was XX X but moment me me airplane in to the what last to the of period over we're market a to And tells overheated in trailing available I that of X nothing that the data the suggests see picture. change at solid, that for demand. not a in This months. XX So

So through the that's environment. you expectations ought how to about go we our about, think demand year, as the

less for on X% of would I have up the just Marine. revenues than year better. And somewhat margin then was The the and thought one were given the somewhat quick a guidance

out do have X.X%? to year, get increased the be than opportunity we throughout the that the higher revenues we margin As your turns

work we'll one one accounted of III the every the we look each has because timing every transition other, from the so Well, and that revenue Block simply to to we learning of sort and margins. back you always lines, as IV, towards our this block Block this changes contracts the -- But a we know on of of our a is see we as move for have give we continuous remember the in we question from we way those And and a goodness some profit. And and margin -- see always bid improved by target share curve appropriately. a same of down have mix. one

does Navy, mean? that but what we've That years. to So continuously got now and operating did means our relentlessly drive for the U.S. that done and performance we've XX

will with we and moment to we comfortable consolidate very hard pretty work the Block So, accelerate you. we're on the at but gave the IV, learning our guidance

go Our ahead from Barclays. Please David next Strauss question. question your from with comes

Thanks. morning. try point want a and put Phebe, GDIT. on finer to Good

publicly is think I looking been that 'XX XXXX 'XX kind a correct? a growth to 'XX the digits, while flat that mid-single that revenue of still relatively rate, is standpoint for you're and said it's from

think very don't book-to-bill, how think good I set some of this whole win 'XX, you to profile. about a specificity in lot context with growth place. increasing a to we're given the we've I about rates, And With that and Yes. tried to post-acquisition but budget

almost So there. this addressable I their X% increase, growth. increase. $XXX is good market pretty darn Good long-term opportunities it That's as was budget look $XXX X% about about at budget that business In impressive. billion, billion,

Thanks.

half to drag more but was know you're and timing? a QX international Thanks. expecting around of this idea are the this the on Any sort can on As second for? a in reverse any year, looking follow-up, side Jason. delay give you the quantification of from that what item I you're

last David, over $X It's it and that's talking right. as the about. continues push right, that think amount continue roughly of I year billion, push what from to to lapsed the a so the to Yes, we're to

it's think of to but year. are I And progressing, two sensitive, slow. anticipate all they're negotiations it good, is that that very this are. powers, sovereign but negotiations understand We these important do diplomatic as are resolving between Progress very,

comes Cowen & question. question next ahead Cai von from Company. Our Please your from Rumohr go with

so much. you thank Yes,

I would the I block say into the second Gulfstream heard thought you that's the XXX in move that quarter. Phebe, So first? If than the aren't how production margins second case, come better the the

said. second I is think what half I

half, excuse. Second

Yes.

So us that quarter. I that's and we'll get the being from through inference mean the second through into that first get lot quarter block the this second and in right, in

So, you're right.

it. Got

and for you're at growth you're lot good be factor around, other are Because looking if very So as obviously you It's several obviously, programs as are won't GSM-O for in GDIT the competitor you in network to do they things large you looking if you lose, projecting. going of of expected competitors how and better are, your those? win, bookings. NextGen pretty competitions terms have look good space, be a kind and we there

So them? how you do factor

for you if and us us think years. you known So us you've and know about

when give at discounted for I a conservative, business good forecast we We discount those opportunities. look for the issue that, that and reflects do and internally are thing think rates. guidance that we rates, are to We the healthy

said, approached we've pipeline X,XXX one -- prism. with -- beauty that their a contracts this through comfortable share. frankly That a no conservative they'll that But is I'm the positive. looking business win their is of through fair So

from Baird. go your from ahead Please Arment comes question Peter next question. Our with

those And the then the Phebe, just in some pursuing what mentioned first Yes, that longer-term up domestically? programs question I that of thanks. on of growth? 'XX that about Good growth, shaping funding how guess regarding supplement I morning, the you're for core platforms. maybe opportunities Thanks. guess, levels how context Combat for fiscal comments some very positive you're thinking international Phebe. the some of you are are could

Sure.

precipitously, did and So is their Army the down as doing. budget go they to wars, utilized of U.S. and slowed hot not exactly have their have do what recapitalizing, rather but now the a and they equipment lot they're recapitalized, the after they that's resource

in And lines our the more their vehicles. So not It a existing the budget is more potential seen have fleet those new needs that capable, program, to developing because upgrade and more fleet right. they're Abrams in considerable existing as is an the modernizing platforms. tank The their -- funding addition your we Army Abram. increases in X, lethal the really version remains system Stryker. Abrams outstanding father's survivable, and is is Stryker

new So those can us requirements core customer franchise Army programs twp We with stead. they for good and how it their demands very, key the understand closely reliable. the what you. are we Army trust of to give very doable customer, art how franchise have and and talked possible the think very is about, think work in our that just that the you about the it of them their cost war the programs, but in there what's we thinking what and the the investment can them also, them help And do you we about on true the fighter fast for on in going programs. also is and so our certainly That's meet how is objectives. dollars and position of ourselves believes to art possible I've their the are who estimates

I So our Army we business business, -- growing. we've look headed. ammunition And here. like know I frankly that's customer, on that where is very everything at I the And are vehicle aligned they're when programs, had ammunition see a big with

armaments that's quarter. our had demands. munitions in And we XX% there the grew our wholesome tempo, increase book-to-bill, will because we think we've been as increase very I our and training operational

some and of States a recapitalization decade's is the see unfortunately, getting United The in America, So in in is States, dangerous NATO outside presence we place European. demand and -- Canada, of long Eastern United heavily have countries, products. those that the where world throughout creates North our the we but outside and UK in more both for that

Our domestically the and Soviet elsewhere. Former European Border opportunities and Block Eastern multiple States Systems has Land and throughout

requirements and for funding a unfortunately world you increased threats they have threat. So need drive we the know live in and drive

Our next go Please question Jefferies. from question. your from with ahead Sheila Kahyaoglu comes

quarter. thank time, and morning you for Good good everyone, the

Just How a we timing I quarter you of any see. bigger of picture growth of impediments and growth excess maybe up flattish. sort do and question, profit XX% revenue was think I mean in think were that revenues that and that inflection that this to and profit about

Aerospace, When defense let's the fulsome to the and break issues you've now. businesses of into pretty contracts you you of have coming got side, that got about through right some given mix. the you've are margin frankly of again, growing pretty really you're it's we and a to factors. I and contracts distinct in, have So fulsome all walk businesses compression. new we've just defense going that think because closing, explanation you're growing mix two on the our going we And and I older

resolve future absolutely will is that into then and the on throughout can So us as get rely years in continuing thing you we -- year one the operating performance. for superb

own we we at our We very are improving what operations. control and good control

better better expect can to you get and as time better and us by. So goes

booked? $X that. appreciate Aerospace I billion was one contract think quarter, that in Thanks. And follow-up, just I you last mentioned

I'm sorry, where?

was with in existing mentioned Aerospace an customer, in quarter? the You billion $X corporate that contract booked

Right.

couldn't I you out. So Thanks. hear

ahead next from Our Please question. Carter Copeland go from Melius Research. comes question your with

morning Phebe, Howard. Good Jason and

what things any One -- quick give incident any elsewhere and two GXXX the I if the the not, ODA industry, could there's ones. Just on assumed -- you just Phebe, there, like extra do thoughts you any certification that wonder us and in risk risk? on on and think on given help scrutiny share just just some there's if the color, given the

got June, think a slip or -- FAA underlying but couple pretty late we're and question. of that weeks so, targeting but think as I they've our does not which so a rigorous the that first may impact a is key process, week the So, really, importantly I deliveries,

We oversight. new and have, not new regulations any seen the any FAA changes or

that So, deliver seen Frankly, really so workload, of work with very closely we and and got they've much but impact. their an haven't we base far partners so them. efficiently, additional ensuring an airplanes

that and prepared remarks, around took you I progress and missiles comments noted the when quality some Okay, you you're great. is this retire in made some as foreseen as progress of indication to you obviously on that the view there, headed cost there's work is opportunity the on, favorably direction? in uncertainty a the then an risk And that make follow-up. that and your maybe risk maybe the had you the there and in to just continue

manufacturing. cost of workforce, is lot production, a help manufacturing very will again de-risked we of and the a our which control. under good schedules. schedules, input us The We're So getting lot from we're at very, optimize the increasingly

is of lot to us a and behind definitely it's better. get going that So risk

JPMorgan. Our next Please comes from Seth from question ahead go Seifman question. with your

very Thanks and good much morning.

over should last business over So out range, we Abrams when of seems at years earlier I billion-ish of it's if for least come sales like $X couple to on level. requested advance the expecting Combat the be kind the look year. mean in up more sales probably I what's we what of question were have at to asked wanted the this about to and It's that next budgets which follow Peter Abram and Abrams Xx, couple being past not the that for years XXXX.

expect tank of be while we'll year, the them the the should rolling Think about plant funding that this end a month. by it where of period this that in the You was seriously for constrained, was tank producing tanks year. end XX out Army a a months this way, to advance. At one

X revenue obviously that the in and to will revenue. backlog that X So drive growth translates increase

just All the guys point consistently mix and is production -- follow-up impact on Stryker, made domestic that some the a an primarily of on growth there's in a have a mentioned there's then that growth Abram issue? right. past, side. shift towards you Abrams And think combat. you Because about that in the that when in we issue? weapons primarily Is munition profitability an X.X, Is

board. the There there mix So is coming on and And also international. are issue between and domestic contracts by things. older newer two mix there's ones driven

-- time. remember ramps protective one we're select down learning ensue so got performance the the Abram that the two will We mobile also our to move curve and over of as again, were doing So up, those and we've firepower. down

one And question, we'll please. operator, take more just

Please from question final with Myles question UBS. go . your from Walton And ahead comes our

launch your process kind it the aircraft? Thanks. next the Good launch the I'm and behind of to to EIS we the bit you morning. of shorter anticipated public How little a And would expect certification curtain? influence the Should it? versus you from privately do of launch for timelines how GXXX, of maybe be as work you more new certification curious, reflect thinking on publicly Phebe, could GXXX kind it maybe

if performance would listen, their any just of but been you lessons everything told do. beating that us Myles, These all we specifications. design that, airplanes extraordinarily these successful learned These programs -- you of is proprietary, program. been to as have from extraordinarily are test of expect successful an developmental have I have

we we So how just processes will and announce work to announce closely to our anything with that continue or going But refine we continue it when FAA will our sensitive. customer forward.

Canadian mentioned a Jason billion push on to clarification, contract And the $X LAV the Saudi. Okay. the you right, for

receivables. the in unbilled of you of receivable? billion size unbilled $X.X the Thanks. square can and kind the those think you've K, also Curious, I current said two of

Sure.

between the contract size. two expect any is balance on process. the the work basically as ongoing It's this contract you'd So of in

the reported published So XX-Q delta really of you'll now is the And was today is to of see the End there. Q&A that billion billion. in $X.X later up at that the $X.X year we end that

reminder, thank website both the everybody to joining first to our you Operator. and for we first Prior our you today. highlights Thank presentation. very a secondarily, release for then refer I'd earnings to as like And us close, the quarter much.

questions, you (XXX) Thank much. additional be If have very XXX-XXXX. reached I any can at you

attending. and for gentlemen, We conference today's we'll thank Ladies that you with call. do close

disconnect now lines. may your You