General Dynamics Corporation

If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. 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. Welcome to the General Dynamics fourth quarter and full year 2023 earnings conference call. Any forward-looking statements made today represent our estimates regarding the company's outlook. These estimates are subject to some risks and uncertainties. Additional information regarding these factors is contained in the company's 10-K, 10-Q, and 8-K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the press release and slides that accompany this webcast which are available on the investor relations page of our website, investorrelations.gd.com. On the call today are Phoebe Novakovic, our chairman and chief executive officer, and Jason Aiken, executive vice president technologies and chief financial officer. With the introductions complete, I will turn the call over to Phoebe.

Thank you, Nicole. Good morning, everyone, and thanks for being with us. Earlier this morning, we reported earnings of $3.64. per diluted share on revenue of $11 billion, $668 million, operating earnings of $1 billion, $288 million, and net earnings of $1 billion. Revenue is up $817 million, a strong 7.5% against the fourth quarter last year. Operating earnings are up $61 million, and earnings per share are up $0.06, or 1.7%. The year-ago quarter had $52 million more of other net income, which helps explain the more modest earnings per share growth. In short, the quarter-over-quarter results compare quite favorably, particularly revenue and operating earnings. The sequential results are even better. Here we beat last quarter's revenue by $1.097 billion, a very strong 10.4%, operating earnings by $231 million, or 21.9 percent, net earnings by $169 million, or 20.2 percent, and EPS by 60 cents, a 19.7 percent improvement. As we promised that it would be, the final quarter is our strongest of the year in both revenue and earnings. In fact, revenue, earnings per share, operating earnings, and net earnings improved quarter over the previous quarter throughout the year. It was a nice, steady progression of sequential improvement. For the full year, we had revenue of $42.3 billion, up 7.3%, and operating earnings of $4.25 billion, up 0.8%, and earnings per fully diluted share of $12.02, down 17 cents, a 1.4% decrease, mostly as a result of below-the-line items like other income, which was higher, and the tax provision, which was lower in 2022. The fourth quarter in the year are $0.049 respectively below consensus. It is important to note the consensus lowered during the two weeks before this earnings release as the sell side became aware of Gulfstream's deliveries from public sources. This miss was exclusively because the G700 did not certify before year end. As a result, Gulfstream was unable to deliver 15 G700s as we in the sell side had anticipated. I will have more to say about this in my segment remarks. While we miss consensus and our own expectations for reasons beyond our control, it should not distract from an otherwise good quarter and year. Let me ask Jason to provide some detail on our strong cash performance for the quarter and the year, overall order activity, and backlog, and any other items he might like to address.