General Dynamics Earnings: Steady Performance and Room to Grow; Fair Value Estimate Up 2%

General Dynamics reported very solid third-quarter results. The company showed some accelerated growth in its defense businesses and some small fluctuations in operating margins, though these remain healthy across the board. We have raised our fair value estimate to $252 per share from $247. This increase is in part due to the time value of money and reining in our long-term capital expenditure forecast. Capital expenditures have returned to historical levels around 2% of sales after a raft of investments in submarine and business jet capacity.