General Dynamics (GD) 24 Jan 242023 Q4 Earnings call transcript

Good morning, and welcome to the General Dynamics Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Nicole Shelton, Vice President of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Dynamics and General Earnings Year the Call. Conference to Fourth Full Quarter XXXX Welcome made our today company's statements forward-looking Any represent outlook. estimates the regarding These and to subject estimates some are uncertainties. risks

company's factors these information Additional XX-Q X-K filings. XX-K, contained regarding and in is the

certain also financial will We non-GAAP measures. to refer

please accompany Investor disclosures measures, this website, are on these the webcast, page comparable about release of investorrelations.gd.com. press additional measures, including which the For to and Relations our reconciliations non-GAAP GAAP see slides that available

Phebe are and today call our Vice Chairman Technologies Officer; the On Financial Executive Chief Novakovic, Jason President, and Executive Aiken, Officer. and Chief

With the introductions to turn complete, the call Phebe. I over will

share and compare Thank Operating you, the Revenue $XX is quarter million earnings million, earnings year. earnings strong operating reported with we earnings billion. per results being which had other Nicole. of quarter billion a year X.X% more of against particularly In last earnings or $X.XX helps and $X $XX of billion for $XXX $X.XXX share Good and of everyone, thanks per net up of $XX Earlier revenue more revenue morning, and growth. us. the million, this net diluted short, are million X.X%. fourth per the favorably earnings. modest ago income, $XXX quarter-over-quarter The earnings morning, up quite explain operating up share $X.XX on

are better. even results sequential The

operating strong EPS earnings we by by by Here, very and XX.X% or billion, million XX.X%, million XX.X% a by improvement. earnings revenue or beat last and $XXX quarter's $XXX a $X.XX XX.X% net $X.XX

for the final the and As strongest year our earnings. would we revenue promised be, it is that in both quarter

quarter a earnings per share, and sequential the quarter earnings improvement. progression of It nice was In year. over the net fact, revenue, throughout improved steady operating earnings previous

up decrease the provision, XXXX. as down we share of had a a billion, X.X% below-the-line lower items per and of operating and which earnings income, year, up mostly which $X.XX $X.XX, For diluted tax of than was $XX.X of $XX.XX higher X.X% like X.X% other revenue billion, earnings full the fully result was in

quarter before The It below sell became year certify release from weeks note is during X this $X.XX GXXX deliveries $X.XX, aware respectively, fourth of the and the exclusively that not earnings was sources. in year-end. did consensus important the side public as This Gulfstream's consensus. the [indiscernible] before to because are miss

result, say more had Gulfstream side a have XX as enabled will anticipated. in and As was about deliver the to to GXXX I segment remarks. this we my sell

our an our and not for control, quarter distract beyond and should consensus expectations miss own reasons we it from While otherwise good year.

Jason and backlog me quarter like cash address. detail to Let any overall the and strong for year, on you order ask the to other performance our activity items some provide might and

story activity nearly morning. value, us of billion, We and Phebe, billion $XXX Order in and contract Thank includes were estimated up a total IDIQ good backlog the and finished XXXX. you, over for $XX.X strong year. options backlog Total last year contracts billion. which was $X.X with

book-to-bill X.X:X they . The X:X year, orders, Overall, the X.Xx full book-to-bill had X:X and led the in year the Defense year, better. X.Xx fourth the the backlog segment quarter of for the In for X or of the book-to-bill a in total with quarter all a had ratio billion. and year. a and $XX.X were segment company full and terms with of of Aerospace the both way fourth ended segments

brings $X.X to billion, $X.X another which Turning quarter us cash operating performance. for flow strong year. operating was flow It our cash billion of of cash to the with

additional strength strong payments flow and Systems Gulfstream in cash achieved Waters, was this of the As previous technologies. continued performance international calls, discussed cash on Combat level on of on programs

rate conversion the entry into for expenditures, a and GXXX. notwithstanding our cash capital was certification ahead anticipated delayed free cash service nicely cash flow the year, for This After the flow our was the of of year XXX%. billion, of $X.X

Looking the us these at investments lion's $XXX Navy full our lower expenditures, to and on At quarter are, capital were to submarine year deployment. of million, shipbuilding in of timing. Capital in fourth share of were expectation course, as the brings shipyards to plant. which a $XXX support million at for call, I our due little X.X% expenditures full sales, than year. the the noted last The capital original higher

naturally So next year. into pushes that some of

we As X.X% and of a thereafter. closer sales X% year to X% expect between result, to be next CapEx and

per our contributed respect share. to we we commercial million XXXX, to in $XXX to voluntary which to the shares plans, quarter, in a $XXX pension repurchased $XXX at dividends included one paid year also There so our with quarter, for fourth million we million finished and contribute approximately were repurchased in With year plans, million full $XX bringing million XXXX. billion. contribution of $XXX the the modest We $X.X X in in the shares no expect

this, billion, $X.X of $X.X last approximately than After year. debt we with more year a $X.X down a position billion, all cash of the net and balance ended from billion XX%

of in We XXXX. million debt have maturing $XXX

That expense net bringing and $XXX the the compares in respective to to full the $XX quarter periods. year interest expense $XXX Our in million, fourth million $XX interest was for XXXX million. million

around $XXX expense decrease to continue million. expect interest in We to XXXX to

slightly tax Turning brings taxes. generally in our income in effective with year guidance. XX.X%, had to quarter, line full an our We XX.X% fourth below, rate the but rate which to

my this expect it turn segment That XXXX, to effective portion ahead foreign to the comments. increase rate of Looking full to tax over Phebe higher I'll for reflecting back we around and XX.X%, earnings. year on remarks, to concludes taxes

Jason. Thanks,

in XX% Gulfstream on for coupled with $X.XX a the The strong year-over-year earnings Aviation. Gulfstream has quarter-over-quarter basis. Jet increase earnings improvement, Aerospace. aircraft, XX% a of overall and on of in represents and XX% quarter, sequential a revenue of story First, increase even $XXX are revenue million. staggering the numbers earnings. increase in a . The in revenue billion growth This in had a strength and operating continuing continuing sequential stronger with increase XX% In business demand Aerospace and the of found aerospace service

The important the third the chain XX.X% margin favoring pricing the in point airplanes contributed station quarter, strong the leading of of of to better in strong overhead response, quarter. delivery is large XX the aircraft, in backlog, XXXX. in-service and in mix to supply in dramatic quarter versus A out work, all increase less the XX improved a absorption here

$XX the I $X.XX margin. are magnitude basis over of up of mentioned revenue point we and fourth certification than and year, close earnings deliver to improvement earlier, operating $X less and of on year in orders a XX from aircraft prior full of revenue million figures. to of by and Aerospace GXXX course, anticipated the year revenue the earnings we as quarter That quarter the earnings. the is only $XX we improved the billion $X.XX ready million XX did in did billion billion $XXX operating Nevertheless, These, for because had in the us and to million slightly go. not not receive of deprived are For

to aircraft well-known the course supply unabled production chain that resolve fourth We began year in in-service of the increase during planned of the quarter. as to of because were issues also

almost with reliability flight the We done GXXX our been all journey function technical we is toward with complete So submitted. where testing process almost paperwork in almost are of and and associated certification? final the inspection are the has FAA authorization.

X.Xx the sequentially we environment. In $XXX contemplating in million inspections their customers million the The the to me said, was the for that are $XXX All meantime, and quarter. year. for quarter asking been book-to-bill delivery schedule year. demand increased let predelivery having to this X.Xx the and turn Backlog

geopolitical demand for Gulfstream order twice a that Jet aircraft during X- So was interrupted year, for event. the for remains second macroeconomic services Aviation. and strong should event to and X-week I aerospace add the intake once for and both a strong at period a

earlier refer case, the pause. in to bank failures intake Hamas attack after the order resumed year and the and In resulted I Gaza. like by the each the on initiated comps Israel brief conflict regional

at into backlog sales a activity. As the uptake first of a we is year, strong and XXXX the XX% first Aerospace in pace. order up remains solid quarter we pipeline detected go sales when since activity the is measurable new

in deliveries about this more forecast, certification a forward the In to increase get excluding delay. look I'll GXXX are we in line original XXXX in and summary, guidance. say with but our results as improved significant We aerospace the margin, operating

to We expect Aviation also continued growth margin at perform improvement Jet year. well the and in

higher year Systems. of quarter point Revenue Combat ago quarter. is X.X% $X.XX the by new on to tank the volume, European operating up million Ordnance of a and of XX and The basis very at including growth the promise, Systems. X.X% good in from largely earnings volume, the are still in Tactical volume Operating international but and XX.X%. quarter It expand margin, decrease Land was driven $XXX and and billion Europe Systems Next, in Eagles programs a up propellant production higher bridges majority programs. was artillery of in

our or Combat's Operating XX.X% particular strength good the driven surprisingly, the margin revenue Combat XXXX expectations. year. at the performance up side basis international business margins. are for by a was provided are the XX% growing very up XXX on very a million or $XXX with in year the year. order Abrams strength outperformed and and on tank, book-to-bill are an By demand main X.X%, Not battle against a munition demand better. flat earnings of the From million or is the a significantly X.Xx in the way, earlier X.X% Europe. comparisons Revenue for million forecast up the $XX for operating perspective, XX% up had year earnings with in sequential point $XX strong even of improvement

strong opportunity quarter and margin group pipeline a we strong year strong order and as activity a revenue a short, had In of with this growth, performance, go good wonderful forward.

quarter attributable the operating are Fourth XXX $X.XXX is to Electric bat. volume annual with for The EAC to basis the quarter. of driven the was XX.X% Marine. XX.X% up These year. Columbia over service continues. decreases rate and class TAL and Boat. year sequentially operating Operating quarter respect growth contracts on point Marine story to and XX.X% earnings. at revenue decreases engineering rate sequential earnings by comparison year X.X% also a margin volume, impact up was ago down and in at powerful Turning the This reduction construction over similarly ago Systems billion

primarily material and at The driven quality were several promised additional out-of-station EAC from to vendors. X factors: problems later drove by EB, which decreases work EB than

work positive the to continuing work. the further with for stabilize funding the chain we additional side, Congress Navy On and the are with help supply to

to are some offset help supply We of to we also chain. process with the up needs where continue financial productivity EB the to set can. from to also its suppliers improvements working certain improve impacts

for then a of began result of Marine billion. has Systems had a give with good group shipyards year for Jason total the and XXXX. which group nearly the I'll backlog she Technologies color responsibility Xx a and you book-to-bill some for $XX for outlook return our for now a year, the on will

Group billion XXXX. was The $X.X operating had $XXX quarter Technologies the versus in down X.X% of year, the very and Revenue of down the earnings prior a fourth while a strong XX.X% million with quarter of solid were year. compared quarter

the and with versus customer-facing was of group's a particularly defense, both electronics X% services. operating grew than solely to and for as however, federal by civilian. group's expectations of of on experiencing mix earnings portfolio. each in that's basis $X.X well products year contraction on up exceeded X.X%, a prior year, businesses segments, defense the intel For results billion faster volume the The Operating with fared strong and revenue the margin its nice billion $XX.X demand across the down our XX . GDIT X.X% growth. increased services revenue function of point IT the were

with to the X between revenue X the top X all line quarterly grown in and was GDIT's break their years. Turning it compared they've up to now past of XXXX, the back businesses. each in down performance quarters

The same the Mission true with quarter. is for fourth of performance the exception Systems' revenue quarterly

listing activity high that unusually XXXX, saw quarter on the businesses quarterly Barring and individual pushing customer a growth. in anomaly order through If group log of Technologies a full recall, fourth to products revenue us The very basis are chain in a protests. jam group's and margins. year, to a revenue year and of both supply comparisons and deliver award favorable. last the the number year's the notwithstanding group an quite on you as the whole a the trend respect had backlog, book-to-bill good continuing achieved X:X right and solicitations With recurring and solid break

$XX they a total billion of in set of record billion, before. had $X under previous Mission with well, got Systems They've annual protest. level GDIT triple pending XXXX. the awards shy received far in and almost in saw awards great year the exceeding bids submitted totaling just the their awards $XX.X as billion another year value adjudication

group's Of IDIQ doesn't hit course, in many contracts of with potential the awards value initially of the form the that come backlog.

So time. To manifest the much to will total the pipeline with quarter and that ended billion the of point, value numbers billion. the in $XX nearly we for results continue $XXX these positive exceeds of qualified over contract reported group's estimated a combined group

all in year all, a for So Group. Technologies great the

XXX be around The be around revenue anticipated The Israel-based forecast multiyear up about over in of Gaza XX%. XXXX. you GXXXs XXX, will So XXXX, expect XXXX. deliveries we supplier. the the group GXXX deliveries of gave about me our in XX over operating conflicts our for than materially is forecast color we let about up the outlook include XXX for business in provide In and XX% on with This 'XX. each a billion, to the deliveries result to mix points margin our then delivered fewer will Gulfstream aerospace is Operating company-wide fewer XXXX impact basis as around and January some we $XX expected rollup. of XX

just the the operating quarters. weaker first XX% year, XX% well fourth anticipate margin and the a As I for half, in third in the and then in second particularly noted, over quarter we

this In year, not While had time we Systems, anticipated, be flat the is revenue challenges. anticipated slightly chain is to last previously supply at less in 'XX. Combat ramp-up than it without

threat changed had environment, the XX% in revenue. we With a increase

'XX in expect margin to in of start coupled order demand The order strong the for revenue we 'XX, improvement To in signals X% munitions these additional we in the could armaments in our basis we activity For up the demand convert to billion, Europe. revenue point to see is about $X.X be a particularly a XX.X%. we saw signals to later extent opportunity and into activity, operating with the business. outlook year, XX and that some result see

expected, In Group flattish I been Marine stronger a As the a noted growth billion remarkable than almost revenues in much forecast. on XXXX, came has earlier, $X.X journey. against

anticipated is in a this revenue $XX.X expected improvement up Our improvement was outlook X.X%, in meaningful both with to revenue billion stronger XXXX technologies, revenue about to result In operating for about to businesses. year anticipates margin of $XX should earnings in be which XXXX. XXXX in than X% billion.

single to legacy Within Systems due the group, GDIT will slightly will new be up slow down transition from Emission a systems digits. on programs. a low and be ramp-up

expected long-term We Operating the margins group margins. for single-digit to improve basis XX to X.X%. industry-leading see growth continued points low are about and

from of $XX.XX. to XXXX, for an points of All XXXX. light We to billion we the basis quarters. first On third strong billion, quarters be rolls around lot a up of increase to So company-wide, of $XX.XX look revenue to with expect operating reasonable approximately this X.X%. an quarterly see fourth and of very margin a anticipate $XX.X up X $XX.X $XX.X. XXX A XX%, forecast would around range EPS basis,

we promise year, seen In growth. go feel better since good across signals our It we summary, stronger has demand this been very of about as environment of have and the some businesses. all I demand organic time into

almost to business improve operating on opportunities we'll we also to execute. the have without must back laser-focused across that very operations. some be goes good Nicole, you. All do is We It saying margins.

Thanks, Phebe.

that chance you a enter could how X remind ask to question participate. to everyone we queue? to follow-up reminder, and a participants please X has the participants so As ask Operator,

Wolfe Research. question [Operator first Instructions] from take Myles Walton We'll at our

through have the curious, say, their FAA place. could pending delivery And in of you ready the The for you you is hoping to control. expecting many on the quarter and this versus, fourth of just have were your your a quarter, from go do first by predelivery confidence where XXX your deliveries are week that surprise. relative confidence was few rules has How [indiscernible] year-end. out take published level for I much mean deliveries process. inspection when touch I'm last customers? also to I pretty could

is them and XX I Gulfstream deliver So go. regular in on we ready and made we the where to hope guess, are this as certification we earlier, tried I could really certification to around that have I are. notifications you in order process. have this much week, quarter. airplanes that the clarity And The no impact material the the as give

there Is delivery guidance an assumed for XXX the 'XX. in

assumed going our we've to what in So guidance. any into airplane we're not given in for -- go

guys you perspective So give let me some this. about

X years, to about which just clarity it's some a control, control. have socket process For that last a fingers like to of process in kind sticking light the we And you a give we predict control. tried your we've over no don't

So I go get these think going any we schedule. but we're are timing then we miss, to slip and certification silent certified around as planes get be FAA going and words forward to like about the hear because specificity . on certified,

next of Epstein America. move at Ron Bank to We'll

Maybe has just ultimately it from Because under chain big the maybe supply just investments, just were -- capacitized. your do just the perspective, base. Colombia Phebe, making see of you EV, to? also DoD broadly, on ship kind back getting seems you circling like and and build a Virginia-class around maybe rates where remarks, some more been industrial The but just capacity just

So thoughts on I any mean, that?

And COVID chain. and in and very in entire a businesses impacted industrial the a are minute in manpower-driven back bit was little about an manpower industry general X availability the So result in significantly submarine our and of base respects. supply let's as heavily These base talk particular. step a shipbuilding industrial

in workers Those base. seasoned the remedy. of the the stunning considerable and number the the begin labor to in retirements post-COVID First, we of throughout with increase caused a chain. had perturbation That, coupled timing really a will supply industrial shortages

sufficient that term some at labor We've closely Electric But Boat, in see there's with clearly in demand But the in supply say learning has capacity that we customer. the Navy work low to with chain. capacity demand moment. our we I'd the throughout stabilization already deal remedy. at the increase the should -- to near are with seen to that or happen we have signal the market, those nicely respect moment

think I the curves, workers as delivery their because chain benefited quality. a in is and very happens key but system And new out so new down improved still they're the down improved to that stabilization at their have they of which come boat our supply robust electrical come higher we learning come nicely. workers need level of training and to learning curves, a we proficiency, doing

year of add in Electric 'XX Virginia about velocity XX% about that. think to throughput I little to a Boat, increased bit and on Colombia. this XX% we perspective on our and by

productivity. So They electric to continue well. just is to do continuing boat needed improve their

that partner So chain we supply been and certainty mention chain. the that continue would in a seeing But of the hard offset get working can to to good orders into financial has of the Navy and from recognizing very chain, supply plan. we're impacts challenges these the supply I helps entire finally demand and some these

quick Virginia years? maybe class And extra would enough an follow-on. Are capacitized we having to meet every the X just require demand one that it. Got [indiscernible] then

you thing we of we're is all think the . can back for It's year at let [indiscernible] me a best to one time. to So do going a at production. I the But the moment with tell that get step X look Navy.

our take next at from Gursky We'll Citigroup. Jason question

we talk how aircraft? of bit you seeing from your if that curious pipeline and the acceptance to of is that just shaping GXXX of seems up perspective you're for a the into kind performing that the wondering plane and kind a that I'm market was Should little I there. could new year? market how be about segment come

We in market. considerable interest in the the excess see design of parameters. performing nicely of that So is end plane very the

positive are quite enters about airplane we that so service. it into when And

in some the converting year, Great. and and year combat coming get how those the the comments But orders Okay. of of the for kind into I'm into curious And revenue guidance. second out can half [indiscernible] actually revenue? we your potential convert of then far them orders just Europe on into your

are and on a combat service little Well, on on the Longer little transaction orders for it orders a longer. depends can take like munitions, quickly. faster vehicles more bit material lead what they move

to we into So factored the demand signals and our known contracting best the plan. the ability, our of of velocity

will And jigs munitions installation the of ammunition we extent to So there as rate. a to even the for think, productivity can as at and as of our scope execute I that that increased that the on it upside, that faster programs extent the -- on the largely additional fixtures on should is help delivery speed well. up well further, be,

think we and in we that you given and with the at risks, with opportunities very plan look, estimates the balanced, But we you cases, all say give I'd -- we've comfortable time. a XX-XX quite we're

We'll go David next at to Barclays. Strauss

might any approaching on a here, that given potential quickly the for we're for process play out thoughts 'XX the Phebe, budget the how sequester? actually

we extent bit have factored our we'll plan. a of do our known extensive then funding has And factored we faster out plan. that have our continuing So in but on we plays CR what a clearly, see you -- -- businesses transaction every differently. have all impact see can't should your that into on of resolution, And it we some that the to an all to continued have because into sequester,

environment. So defense pass hopeful Congress the threat we'll is in bill, to we that adjust particularly critical times, accordingly. these are able But the a given

obviously, this given in all deployment. assume you as -- in capital little guidance I 'XX. mean, free a Okay. in helped have drag, year. usual ask was wanted the do very taxes includes to How has deployment, about for those but of moving Jason, high. some with your advance really been And pieces? lot, about your should flow big think cash big and a cash inventory maybe that I capital maturities I help have factor How nothing we

Yes.

in XXX% affect that you about continue that we cash bit are a but what free the Obviously, 'XX. 'XX in to and expect when flow, anticipating doesn't we outperformed range So conversion beyond. we XXXX, in think in

-- So a larger and headwinds scale little We've a settle good of news starting bit. cash some flow then lot to moving experienced parts years. the big is if are around corresponding the down the can now, think fairly tailwinds ahead, right conversion. or above past a XXX% at you look expect But Aerospace several over I group, you conversion the steady some slightly for

it, about backlog big we think when the the you a over all tailwind in. got pretty deposits were When they past coming were significant building the and years few

any So inventory than that offset more of effect build.

you as minus inventory, then or assume into starting you period for that you pretty X:X XXX% a be book-to-bill, should in a transition plus deliver at regular rate you're burn So steady conversion business. that where a to off but

great on to made see that through the and recent some on some we've Systems, in programs years. continue as Combat process on work hand, they the of tailwinds other work progress should international receivables in the

investment. we technologies So group up alluded of a we'll will that now, Navy the XXX% as we're provider of as for large Marine is terms holds, Group, conversion. projects, well the above still in continue that see steady The And Systems a coming of is finishing through above some what capital couple and noted, the to, future years. -- Phebe

when together, But kind the XXX% those all we're of for right about coming you net year.

notes November mature a of year. in in got We've not lot look terms capital in this of you out noted, commitment. million you If at that as there's $XXX deployment,

rush play plenty do options as all to out decide what got time of And have. that want we'll No we of we've how So kind see on maturity. things with at always that look we and decision.

should our government of moves quarter over threat for that the into and And out year, the of of and a the of got hung at uncertainty thinking as we last capital. shutdown sort deploy looked environment. sort preserve about the share we've we think I last We significant the repurchases factors last more, how cash of stepped-up last think of environment. opportunity as I as great say, year, half

optionality as So deployment in March, capital we lot ahead if we I can the get that it provides us of front. on think then a look past for

make want we think in repurchases focus tangentially, we give a you and perspective. demand a growth mentioned guys really about, about bit book-to-bill talk businesses, increasingly the it's signals One not to it, forecast. compelling. thing Jason that that's If about share our little purposes, planning our some for just a expected you talked I and on When see X:X just

So keep just . in mind. that

We'll move to next Sheila Jefferies. Kahyaoglu at

on color Gulfstream. Great

gave the which of revenues to and the slipped for a You profit up the profit from maybe could around north some have given few you that and Any profile you on and lost the XX% XXX GXXX XXX quite the of imply GXXX numbers into margins would give GXXX, and 'XX built already. the color relative XXX.

in. Can of you repeat coming the of last part your kind question, was it

Sure.

the as because to revenues the the It gave profile XXX XXX of. [indiscernible] service and the of just relative XXX, was you Sorry. profit just GXXX the more

Gulfstream as about comes margin call, noted this, the of my in are host mix driven at all Yes, as by in talked quite as know, out of station expert work, XXX But you is this I all pricing And issues. at including a impacted. performance you over accretive years, and on many the remarks, the of margins. in we

nice So I stick in really question -- the is very to But and coming airplanes think, you as again, the mentioned that it think our quite are plan think way. these at I about not but asked, new balanced that plan, with way I margins. really about earlier, it I'd

and as one business, And talking in revenue demand your growth then if about peers below well. you could more the tends ask combat, defense what And have Marine are of be on I just side the Okay. of but growth. pretty earnings robust lot to given a

that. seems and continue about is grow of some profit? just do So Combat It How like given GD's to you mix. ability think to inflation defense seeing

seeing some also of a some and I give perspective the happened industrial group, the COVID. you impacted it result what it, Gulfstream Combat the tried Marine in as to on is but of base earlier of to -- impacts

operating of question excellence, operating a focus We're operating to on really going it's very excellence. us, for So heavily. that excellence,

looking profitable we now. value increased the that proposition growth. at . we're So drive That's right

next to We'll . move Seifman at JPMorgan.

second some Combat. growth if adjust activity guide, to of growth Or the what quite the about might half, just the that double about down for guess, cadence saw wanted would half. robust come lead we we that digit. seeing in really or second would the second half. growth off start for I 'XX, here there off even down perhaps the some I levels thinking I in is we're reason early or something the have properly? at the And that X% half asking first in then And to imply X% thought in flat seasonality, the like to in some even being step I Am really not

look anything in a more macro I to that. with No. come little wouldn't lumpier. In growing respect environment, to contracts quickly tend at a bit

is a of this so simply timing. question And

But I the the then faster think mid- in of the saw have of on. last year, our upper the the see the we higher couple first is digits contracting of slowdown single acceleration that demand as a upper may bit over that we execution period. we a we've year single there. over toward you quarters goes given and and to plan But digits plan given

Sure. Sure.

that probably then kind about bunch started us expectations as Excellent. the there look guess aerospace Since stuff business gather. that gave and a the demand ago. it's aerospace, of at happened. Okay. And to years I the on has X multiyear you of

pushouts. the seen a stronger than little chain issues, has probably We've supply some expected. think been also I some certification demand

can Is we a terms at sort about aerospace that time? you update for outlook As think in and this of multiyear profitability. deliveries of something

Yes.

will this going airplanes XX and But more given that. point, year. deliveries additional I at We more . you plan XX that's issues more that this any we're even goes it's mentioned, going in say deliveries. you XXX will be we're -- fidelity So than to deliver on. our owe time granular as to be that the not

Goldman Poponak Our question comes Sachs. next Noah from at

to had supply $XX billion market? bit was managing just bigger following change directionally, that, a it's where and the if revenue, quarter, demand figure to bit, talk business order little and know billion out. trying slowed unique go how you I that's $X based this rating But you market backlog, about imperfect. pretty but maybe I we're to you're the little out hear a $X in run a on Phebe, billion in jet settles on that's Because now picture. it quarter, to but made versus in this a curious rate

And backlog focused so grow, to but and more pricing customers margins want and you're to on you to you want and I get than also know want that units. maintain you airplanes

you're so you go higher, said, going I XX backlog. burning then to to you're if set, you'd going And as and guess, the be just

that So demand multiyear you supply versus think market? how do managing about in that

the Well, start pipeline I don't year. this good given us see we through that we a have. the robust backlog given particularly and robust off have backlog burning We're to

And demand. airplanes and that burn anything see new We is don't and out through a that, clean incremental particularly have I to abatement of that it drive see So unhealthy we some drive don't case turning certainly an time see -- be much believed in we're the that. we sheet backlog. for seeing the

Okay.

rate pick quarterly in like sounds you to more as forward potentially up moving that the your new back are it entrenched market. order So airplanes the expect

the to been and by would in order and look, quite come this we pipeline year. expect wholesome, healthy orders rate the Well, additional supported quite has

quarter, on looking a of to looking very interest nice any So are demand, seen orders but at elements pipeline. rely we've foundational the on solid we're that continuing . real ultimately those we production can not for around going-forward going me, basis, and per you To give what a granularity be. sort

Cai von We'll at to TD move Rumohr Cowen. next

numbers. Good

So X issues. [indiscernible],

the impact think on in your get secondly, of the and deliveries? terms that ability of to that mentioned what maybe And status me the GXXX, attack tell and I the good be question you is, means margin -- the incremental low the Hamas First, which quick GXXX. math, given seems your by my guidance like at it for XX% you Gulfstream, should an margin margins 'XX implies on looks getting the bigger

You're right.

any in in from an that given something agree shouldn't Let's first -- not moment implied margin. we're we

I think and quarter think we you but factors we've more have supply go. myriad this you any I really than environment got given it. think a margin we We we probably encouraged to are balanced is as driven to the multiple better think, where over very ways of plan, by that by times. a that in how very, about That's most I in performance given that I have know, chain, stick the plan. And gone

adjusted as to perform expectations that the factored to have we said, retirees With we They properly into XXX, respect are and deal of for realities I with are the there. all management. of our plan with year. the And our to what facing continuing they

understand enough drag, still a the I sort get So I there's margin. -- they is -- mean, Is P&L that quite that can't the of fact XX% the timing. that don't for

is wouldn't during increase in year. frankly, of factors pivotal it's improvement a half a impacting I latter year, It's We us. P&L of significant allowed reality but the the the in a the us of that say the of a chain saw multiplicity year. the 'XX are to just supply production course drag.

were fourth and If delivered us XX there's ability about makes we it between to is But continue quarter, more are a XX production. pretty can the in optimistic quite at But supply time, delivering aircraft, the the well. that indicators you and we we increase recall, to that of and up. chain one XX they're that are risk. step this keep doing cautious -- All we

to we're say, but I As a we've got optimistic, ways go.

We'll move Research. next Shapiro Shapiro to George at

here this the following like extraordinary. question. XX% Just pretty mean margin is incremental Kai's on in was a quarter, bit up fourth which I

that to changes So that point knock what the I comment? Kai's down mean really to

been level of chain given talk very GD are reverse [indiscernible] infer I service, good Look, their That of coming on business, operating underlying those at aviation, operating let's years its and capabilities. lot complexity timing supply would guys of almost the contributing. but them with leverage. with out has acquired and of incremental from station nothing business. You won't are to around this things impact -- performance mix and it. all a they They've a gross performers of of engineering been deal change, of about since any margins margin, it's quarter's, have strong we the operations. mix Gulfstreaming jet always . the impossible and margin good the work and ago,

nothing the and other nothing there's are about systemic So to and margins, supply those its issues we you than that over you they and there chain systemic ability here. will revenue earnings where issues. temporary concern Gulfstream time know But is you we that work through and increase stand on

one down Ajax The $XXX up. unbilled that the And in receivables Is just million catching you, for quarter. were like Jason.

Ajax bit a on program yes, Those big Systems. our payments the X bit international little of and It's a the little pieces, it's ongoing and Combat large other are George.

Melius We question at Spingarn Research. will take Robert our next from

million $XXX million marine million about $XXX guide talked in And growth. implies about past, sales $XXX growth Colombia year. per The the to you've driving in of

economic So for Virginia be income sales meaningful adjustment of and for class operating could price an Marine in a source XXXX.

be adjustments we next growth. lumpy. source -- years, in and EPA in $X Look, Well, being growth But $XXX $XXX expect the always million can always X per I way a of that about talked the million billion to think year. annum million any a good income. marine we've the given in between somewhat XXX

lumpier on So growth -- than there. is than comes than it might is want, a It -- the but might one in you basis there. just

all Virginia respect with Navy work and Navy. that's as Colombia continuing to impact on the And EPA Virginia, just We and with a contemplated prioritization any of revenue, of if -- think you through to on upside. But the the so work had anything adjustments, given indicator the changes we're we'll had particulars this we as year's accordingly Navy. a adjust progress it the and pretty we've we with in the good

yet. nothing there's clear, there be for to an just in adjustment So

No.

I an it's in put . numbers premature with before to think got you. you've agreement

question. more we time have think I Audra, And for just one

at from Arment We'll Baird. take question Peter that

on just add speak to Marine. on just maybe Phebe, and

given there details the seen the resources is industry, know capacity relief of you've on Sense good But some pressures you a been Rocket an customer. lot and yards? I and kind the Is really of Is additional opportunity? to us I the get at for up there an some a at used opportunity were. what Navy and has some Production mean free for munitions. to partner Act we've some improve the Just throughout of Motors

for So we the the Colombia of many, many pretty in V. the have well and Block been years anticipation Navy resourced by and particularly

the and So from where Navy is the out on-time I from of and delivery we supply our of chain. assistance think some the stabilization out of need continued really -- perspective, coming assistance quality

want that a for with sure listen, be year, . And will work you ability wanted opportunities earnings supply is And call. this of So in I think will service us the pain know, relieve just the I remain and him leave, excellent I'm I continue -- this work that as his to his this many be there chain. He years additional find Navy for to technologies. may last for at points is will I Jason's missed, CFO. some we as to those thank but go of before through

done over sure I'm congratulating the me a will Jason join So job you on of well CFO superb years. all in

Okay. Well, thank you all for joining our call today.

earnings Dynamics reminder, the the highlights for quarter a fourth release General presentation. website As refer please and to

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

you today's concludes participation. Thank this call. conference for And your

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