General Dynamics reported second-quarter 2017 diluted earnings per share of $2.45 compared to $2.30 in the year-ago quarter, a 6.5 percent increase. Net earnings were $749 million, on revenue of $7.7 billion.

“General Dynamics’ strong second quarter performance reflects our focus on operations and executing on our programs,” said Phebe N. Novakovic, chairman and chief executive officer. “We are confident in our outlook for the future, built on a solid defense backlog and continued good order activity across the portfolio of Gulfstream business jets.”

Margin

With three of the company’s four business groups expanding margins over the year-ago period, company-wide operating margin for the second quarter of 2017 was 13.8 percent, a 60 basis-point increase when compared to 13.2 percent in second-quarter 2016.

Cash

Net cash provided by operating activities in the quarter totaled $477 million, up 21 percent from the year-ago quarter. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $386 million.

Capital Deployment

The company repurchased 2.7 million of its outstanding shares in the second quarter. Year-to-date, the company has repurchased 4.6 million outstanding shares. 

Backlog

General Dynamics’ total backlog at the end of second-quarter 2017 was $58.6 billion. There was order activity across the Gulfstream product portfolio and strong demand for defense products, including another quarter of a book-to-bill ratio (orders divided by revenue) greater than one-to-one in the Information Systems and Technology group. The estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity contracts and unexercised options, was $24.4 billion. Total potential contract value, the sum of all backlog components, was $83 billion at the end of the quarter.

Guidance

The company is increasing its full-year EPS guidance from $9.50 - $9.55 to $9.70 - $9.75.