General Dynamics reported first-quarter 2017 earnings from continuing operations of $763 million, a 16.7 percent increase over first-quarter 2016, on revenue of $7.4 billion. Diluted earnings per share from continuing operations were $2.48 compared to $2.08 in the year-ago quarter, a 19.2 percent increase.

“General Dynamics delivered very strong first-quarter operating performance, demonstrated by 13.9 percent operating margins and 10.3 percent return on sales,” said Phebe N. Novakovic, chairman and chief executive officer. “We are on track for a productive 2017 as we continue our focus on operational improvement and successful execution on our robust backlog.”

Margin

Company-wide operating margin for the first quarter of 2017 was 13.9 percent, a 150 basis-point increase when compared to 12.4 percent in first-quarter 2016.

Cash

Net cash provided by operating activities in the quarter totaled $533 million, up 11 percent from the year-ago quarter. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $471 million.

Capital Deployment

The company repurchased 1.9 million of its outstanding shares in the first quarter. In addition, in March, the board of directors increased the company’s quarterly dividend by 10.5 percent to $0.84 per share, representing the company’s 20th consecutive annual dividend increase.

Backlog

General Dynamics’ total backlog at the end of first-quarter 2017 was $60.4 billion. There was order activity across the Gulfstream product portfolio and strong demand for defense products. The estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity contracts and unexercised options, was $24.6 billion. Total potential contract value, the sum of all backlog components, was $85 billion at the end of the quarter.