Novakovic outlined the outlook during General Dynamics’ second-quarter 2026 earnings call. Combat Systems posted a book-to-bill ratio of 2.1 in the quarter, with management pointing to international vehicles and munitions as major sources of demand.
“Demand for Combat Systems products is strong, primarily driven by US allies,” Novakovic said. She added that Ordnance and Tactical Systems, or OTS, continued to record particularly strong growth in munitions.
Looking ahead, Novakovic said OTS should deliver double-digit growth, citing artillery, missile components and “155s.” European Land Systems is also expected to grow at a double-digit rate, with the two businesses together supporting high-single-digit growth for Combat Systems.
The outlook comes during a transition at General Dynamics Land Systems, where U.S. land-force customers are moving toward next-generation platforms. President Danny Deep said the breadth of the Combat Systems portfolio, particularly international vehicles and munitions, was allowing the segment to maintain a healthy growth outlook through that transition.
General Dynamics is also positioned to participate in higher missile production through its role as a supplier to major missile manufacturers. Deep said OTS and Mission Systems are subcontractors to a number of missile prime contractors and provide components across much of the missile portfolio.
At OTS, that content includes actuators and motor cases, while Mission Systems supplies guidance systems and other components, Deep said. General Dynamics is not the prime contractor on those programs, but forms part of the production supply chain.
Deep said the company has mirrored production framework agreements reached by missile primes, positioning its businesses to increase output alongside those customers. “We have mirrored agreements with them to ramp up,” he said.
Management linked that industrial expansion to a broader requirement for higher U.S. weapons production. Novakovic said weapons manufacturing had operated for an extended period at very low rates or at levels largely designed to sustain existing production capacity.
Increasing output to meet the current threat environment will require additional funding, she said. “The entire industry does,” Novakovic said, referring to the need for more funds to increase weapons production.
Combat Systems generated $2.3 billion in second-quarter revenue, with higher activity at OTS and European Land Systems offset by a decline at Land Systems. Novakovic said strong order intake continued to build a significant backlog, while Deep said management was confident that more orders would follow.
