Management highlighted the shipyards during General Dynamics’ second-quarter 2026 earnings call, where Marine Systems was one of the company’s strongest-performing businesses. Revenue in the segment increased 10.4% from a year earlier, while operating earnings rose 17.5% and operating margin improved by 40 basis points.
The Columbia- and Virginia-class submarine programs remained the largest contributors to Marine Systems’ revenue growth in dollar terms. But Novakovic said Bath and NASSCO both outpaced Electric Boat in percentage revenue growth during the quarter, something she said had not happened before in her memory.
“At Bath, growth will continue as we improve our throughput and productivity,” Novakovic said. She said the Maine shipyard had made material improvements in both areas over the past several years and expected that progress to continue.
Deep pointed to the latest DDG-51 destroyer as an example of improving execution. He said the ship’s delivery was accelerated by almost three months versus plan because of its performance during sea trials.
The company also sees additional growth potential at NASSCO, its West Coast shipbuilding operation. Novakovic said higher demand and progress down the learning curve on oilers and other support and supply ships should support further expansion there.
NASSCO has the design and manufacturing capabilities required to build complex auxiliary vessels, including submarine tenders and oilers, Novakovic said. She also pointed to available capacity at the shipyard, which gives General Dynamics room to accommodate additional work.
The surface-ship performance is part of a broader effort by General Dynamics to increase output across Marine Systems. Deep said the company was making progress in accelerating build rates and viewed improving productivity, combined with the segment’s backlog, as an opportunity to speed deliveries of submarines, surface combatants and auxiliary ships.
General Dynamics has also been investing across its shipyards to support higher production. Novakovic said the company had made significant investments in the facilities and intended to continue spending to meet additional demand tied to U.S. national security requirements.
Chief Financial Officer Kim Kuryea said capital investment would increase significantly during the second half of 2026, with particular emphasis on the shipyards. She said the spending was aimed at accelerating production and preparing the company to meet future demand.
Management also indicated that Marine Systems has substantial work still to execute. Deep said the company had raised its 2026 Marine sales outlook by almost $1.3 billion compared with 2025 and did not expect growth to slow significantly, even if the rate moderates as the business becomes larger.
General Dynamics now expects Marine Systems to generate about $18 billion in revenue in 2026, with an operating margin of 7.4%. The outlook reflects continued expansion across a shipbuilding portfolio that includes submarines, destroyers and auxiliary vessels.
