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General Dynamics (NYSE: GD) has been among the best-performing defense stocks so far this year, but the company stubbed its toe this earnings season. Shares traded down nearly 6% as of 12:30 p.m. ET on Wednesday following a bottom-line miss.

Gulfstream in a holding pattern

General Dynamics stock came into earnings season up about 13% for the year, well above the break-even performance of most defense suppliers. The company's combination of business jet and defense assets seemed poised for above-average earnings in 2024, making it a top pick among investors.

But the company's Gulfstream unit didn't get its new G700 business jet certified by year's end, as hoped, and the delay took a toll on earnings.

Earnings per share were $2.88 in the quarter on revenue of $10.7 billion, a mixed result compared to Wall Street's consensus estimates of $2.93 in EPS on revenue of $10.3 billion.

"Our businesses delivered solid operating results in the quarter, growing revenue and backlog, while expanding margins, even as we awaited G700 certification," CEO Phebe N. Novakovic said in a statement. "In the aerospace segment, the recent FAA certification of the Gulfstream G700 has enabled us to begin customer deliveries. This is a strong start to 2024, and we remain confident in our outlook."

The defense side of the business is doing well, led by combat-systems revenue growth of 20%. Overall, defense booked as much new business as it billed out in the quarter.

Is General Dynamics a buy following its earnings miss?

The thesis heading into 2024 was that a combination of geopolitical tensions and demand for Gulfstream's new models would push General Dynamics higher. Internal changes to the way the Federal Aviation Administration handles the certification process delayed that thesis, but it is far from sunk.

General Dynamics' military business has good exposure to areas of Pentagon demand, and an aging fleet of business jets should create opportunities for the now-certified G700. The company also pays a dividend, currently yielding just over 2%, and has been steadily using repurchases to reduce its share count by nearly 20% over the past decade.

Earnings didn't go to script this quarter, but the case to buy General Dynamics is just as strong today as it was before the company reported.

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Lou Whiteman has positions in General Dynamics. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.