Textron, Northrop Grumman, and General Dynamics Report: Three Stocks

– Three Winners!

A Tale of Three Defense ContractorsThree of America’s

biggest names in defense contracting reported earnings

this week – and the investing crowd went

wild!

What:Textron (NYSE: TXT) was first out of the gate, reporting earnings Tuesday morning and seeing its shares surge 9% in response.

So What:Quarterly sales slid 7%

year over year to $3.25 billion

Profits were off 18% at $0.60 per share

And manufacturing free cash flow dropped by nearly two-thirds to $89 million

Now What:Textron “beat earnings” for the quarter, which may explain why investors reacted so positively.

The plunge in free cash flow is nonetheless concerning.

Priced at more than 200 times this year’s likely cash profits, Textron

shares look very expensive.

What:

• Text

Next came Northrop Grumman (NYSE: NOC). The drone-maker reported runaway profits Wednesday, then watched its share price rocket more than 7%.

So What:Sales slipped 2% to $5.9

billionBut slightly higher

profit margins and a big reduction in share count led to…

…16% improvement in profits per share -- $2.74!

Now What:

Northrop Grumman has been taking on billions of dollars in

debt to fund its share buybacks.

That can’t continue forever. But if buybacks stop, earnings

growth will suffer.

Caveat investor.

Text

What:General Dynamics’ (NYSE: GD) results were nearly as good, as was its price pop. By early Friday, the shares were up more than 4%.

So What:General Dynamics

delivered perhaps the week’s best news:

Sales up 5.5% to $7.9 billion

Operating profit margins up one full percentage point

And a whopping 44% increase in earnings per share -- to $2.27

Text

Now What:CEO Phebe Novakovic called

her company’s performance “rock solid” – and we agree.

With billions of dollars of new armored vehicle contracts to execute, and a potential big shipbuilding win from

the US Coast Guard, General Dynamics’ future

looks very bright.

Text

This $19 trillion industry could destroy the InternetOne bleeding-edge technology is about to put the World Wide Web to bed. And if you act quickly, you could be among the savvy investors who enjoy the profits

from this stunning change. Experts are calling it the single largest business opportunity in the history of capitalism... The Economist is calling it

"transformative"... But you'll probably just call it "how I made my millions." Don't be too late to the party -- click here for one stock to own when the Web goes

dark.