General Dynamics Corp. (NYSE:GD)

The financial data reveals several notable trends over the analyzed period. The revenue composition shows a decline in the share of products as a percentage of total revenue, decreasing from 64.44% in 2015 to 58.78% in 2019. Conversely, services as a percentage of revenue exhibit an increasing pattern, rising from 35.56% to 41.22% over the same period, indicating a gradual shift in the company’s revenue mix towards services.

Cost of revenue as a percentage of total revenue remains relatively stable but slightly increases from -80.52% in 2015 to -82.06% in 2019. This increase contributes to a modest decline in gross profit margin, which decreases from 19.48% to 17.94%. The consistency in cost structure with a slight adverse trend impacts overall profitability.

Operating earnings follow a gradual downward trend, decreasing from 13.28% of revenue in 2015 to 11.81% in 2019. General and administrative expenses relative to revenue remain fairly constant, fluctuating narrowly around -6.2%, indicating maintained control over administrative costs despite changing revenue composition.

Interest expense shows a concerning upward trend, increasing from -0.31% in 2015 to -1.2% in 2019. Although interest income remains minimal and stable around 0.03% to 0.05%, the net interest impact worsens substantially, suggesting higher debt servicing costs or increased borrowing during the period.

Net earnings as a percentage of revenue show a gradual decline over the period, falling from 9.42% in 2015 to 8.85% in 2019. Earnings from continuing operations follow a similar pattern with a slight decrease, while provisions for income tax show a notable reduction from -3.61% down to -1.82%, which may reflect changes in effective tax rates or tax benefits realized.

Discontinued operations have minimal impact and irregular presence in the data, with a slight negative effect recorded only in 2016 and 2018. Overall, net earnings demonstrate a mild erosion in margin, corresponding with increasing costs and interest expenses despite relatively stable administrative expenses.

Revenue Composition

Decline in products revenue share; growth in services revenue share.

Cost Structure

Cost of revenue slightly increases, reducing gross profit margin over time.

Profitability

Operating earnings margins decline steadily; net earnings margins decrease moderately.

Operating Expenses

General and administrative expenses remain stable relative to revenue.

Interest Impact

Rising interest expenses increase net interest costs, adversely affecting profitability.

Tax Provision

Provision for income tax decreases significantly, partially offsetting profit margin declines.

Discontinued Operations

Insignificant and sporadic effect on net earnings.