Huntington Ingalls Industries (NYSE: HII ) is a defense contractor and the leading naval shipbuilder. Its competitive advantages include an effective monopoly in specific ship classes, scale, a classified workforce, and technical expertise. The company is undervalued, the dividend yield is the highest in aI am a self-taught individual investor and I have been investing in stocks for over 25 years. I focus on dividend growth investing with a long-term horizon since I believe in the compounding power of divid ...

Group 1 - The article discusses the investment opportunities in the aerospace, defense, and airline industry, highlighting the role of data analytics in identifying these opportunities [1] - Huntington Ingalls Industries (NYSE: HII) was previously rated as a buy after a significant drop in stock price following its earnings report [1] - The investing group, The Aerospace Forum, aims to provide insights and analysis on developments in the aerospace sector, emphasizing the industry's growth prospects [1] Group 2 - The article emphasizes that past performance does not guarantee future results, indicating a cautious approach to investment recommendations [2] - It clarifies that the views expressed may not reflect those of Seeking Alpha as a whole, highlighting the diversity of opinions among analysts [2] - The article notes that analysts may not be licensed or certified, which could impact the reliability of the investment insights provided [2]

PASCAGOULA, Miss., Feb. 07, 2025 (GLOBE NEWSWIRE) -- HII's (NYSE:HII) Ingalls Shipbuilding division awarded $95,600 in STEM grants today to 22 local schools and educational organizations, reinforcing the company's commitment to fostering innovation and critical thinking among youth. The grants will support a variety of hands-on projects, classroom technology enhancements, and STEM-focused curriculums. "STEM education isn't just about learning formulas or theories — it's about hands-on experiences that inspi ...

PASCAGOULA, Miss., Feb. 07, 2025 (GLOBE NEWSWIRE) -- HII’s (NYSE: HII) Ingalls Shipbuilding division awarded $95,600 in STEM grants today to 22 local schools and educational organizations, reinforcing the company’s commitment to fostering innovation and critical thinking among youth. The grants will support a variety of hands-on projects, classroom technology enhancements, and STEM-focused curriculums. “STEM education isn’t just about learning formulas or theories — it’s about hands-on experiences that insp ...

Financial Data and Key Metrics Changes - In Q4 2024, consolidated revenues were $3 billion, a decrease of approximately 5% year-over-year, driven by lower revenues across all segments [31] - For the full year 2024, revenues totaled $11.5 billion, an increase of $81 million or approximately 1% compared to 2023, primarily due to higher volumes at Mission Technologies [37] - Net earnings for Q4 2024 were $123 million, down from $274 million in the same quarter last year, with diluted earnings per share at $3.15 compared to $6.90 [36] - Full-year net earnings were $550 million, compared to $681 million in 2023, with diluted earnings per share at $13.96, down from $17.07 [44] Business Line Data and Key Metrics Changes - Mission Technologies achieved revenues of $713 million in Q4 2024, a decrease of 4.3% year-over-year, primarily due to lower volumes in C5ISR [32] - For the full year, Mission Technologies revenues were $2.9 billion, an increase of 8.8% from 2023, driven by higher volumes in cyber, electronic warfare, and space contracts [38] - Ingalls revenues for 2024 were $2.8 billion, a slight increase of 0.5% from 2023, while Newport News revenues decreased by 2.7% to $6 billion [38] Market Data and Key Metrics Changes - The year-end backlog was $49 billion, with $27 billion funded, and 2024 contract awards totaled $12 billion [10] - The company expects to secure over $50 billion in contract awards over the next 24 months, indicating strong demand for its products and services [6][28] Company Strategy and Development Direction - The company aims to grow to $15 billion in annual revenue by 2030, with associated margin expansion and free cash flow growth [9] - Operational initiatives include a target of $250 million in annual cost reductions and a focus on increasing throughput and workforce stability [22][21] - The company plans to increase outsourcing by 30% in 2025 to address critical skill gaps within its shipyards [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving historical margin levels of 9% to 10% in the future, citing ongoing negotiations for new contracts that include inflation protection [66][68] - The company anticipates that the majority of its revenue by 2027 will come from contracts reflecting the current operating environment, which should facilitate margin improvement [52] Other Important Information - The company completed significant milestones in shipbuilding, including the delivery of submarines and aircraft carriers, and expects to deliver five ships over the next two years [28] - The Defense Authorization Act for fiscal year 2025 supports the company's shipbuilding programs, authorizing funding for multiple vessels [26] Q&A Session Summary Question: Margin outlook and inflation impact - Management acknowledged the challenges of inflation on margins but expressed belief that achieving 9% margins is possible with new contracts that include inflation protection [60][66] Question: Contract awards and guidance assumptions - The guidance assumes contract awards for FY24 and negotiations for Block 5 and Columbia contracts, with confidence in securing these contracts [76][81] Question: Lessons from past performance and EAC improvements - Management highlighted the importance of transparency and accurate cost estimates in negotiations, with expectations for improved profitability as pre-COVID contracts are phased out [88][99] Question: Shipbuilding margin guidance - Management indicated that the guidance reflects a conservative approach, considering recent negative adjustments, but expects gradual improvements in margins over time [155][156] Question: Hiring plans and shipyard capacity - The company plans to maintain hiring levels while focusing on experienced personnel, with no immediate plans to acquire additional shipyards [120][123] Question: Free cash flow expectations - Management expects free cash flow to improve as pre-COVID contracts run off, with a return to more normalized levels anticipated in the coming years [129][132]

Military shipbuilder Huntington Ingalls (HII -16.84%) missed quarterly expectations, and its issues are likely to continue into the new year.Shares of Huntington Ingalls traded down 17% as of 11:15 a.m. ET, as investors see little reason to get excited about the stock right now.It's tough to turn a battleshipHuntington Ingalls is one of two major shipbuilders for the military, and its massive Newport News, Virginia, shipyard is responsible for producing the nation's aircraft carriers and other important ves ...

Defense Budget and Market Conditions - The U.S. defense budget is under pressure, which may impact funding for individual programs and delay customer payments[89] - Competition in the shipbuilding market is intense, with potential reductions in U.S. defense spending increasing exposure to market competition risk[99] - Military conflicts, such as those involving Russia and Ukraine, have led to increased security assistance, potentially shifting defense budget priorities[89] - Changes in Department of Defense (DoD) business practices may affect procurement processes and impact current programs and potential new awards[95] - The DoD is accelerating the development and acquisition of new technologies through rapid acquisition alternatives, which may affect strategic business opportunities[96] Contractual and Financial Risks - Approximately 48% of revenues in 2024 were generated under fixed-price incentive contracts, with 47% from cost-type contracts, indicating a significant reliance on these contract types[108] - Cost overruns have adversely impacted results of operations, particularly under fixed-price contracts, which increase financial risk due to inflation and labor shortages[111] - Changes in estimates used in contract accounting have affected profitability and may continue to do so, depending on various risk factors[92] - The company has experienced a higher number of audits due to cost recovery initiatives, which could adversely affect financial position and cash flows[97] - The company's earnings and profitability are dependent on subcontractor performance and the availability and pricing of raw materials, which can lead to unexpected cost growth[116] - The company relies on sole source suppliers for certain components, which poses risks to contract obligations if these suppliers fail to deliver[119] - Future success depends on increasing shipbuilding capacity, which may involve investments, partnerships, and hiring qualified personnel[121] - The company faces risks associated with innovative designs and new technologies, which can lead to delays and increased costs in contract performance[122] Workforce and Talent Management - The company faces challenges in recruiting and retaining qualified personnel, which may negatively impact business performance[113] - A significant portion of the current workforce is nearing retirement, impacting the ability to maintain performance on long-term contracts and potentially leading to inefficiencies[114] - Increased competition for talent has resulted in higher labor, recruiting, and training costs, negatively affecting financial results and cash flow[115] Cybersecurity and Regulatory Risks - Cybersecurity threats pose significant risks to the company's operations, potentially leading to financial losses and reputational damage[131] - The use of artificial intelligence presents inherent risks, including operational inefficiencies and potential legal liabilities if not managed properly[137] - Evolving regulations surrounding AI may require the company to adjust operations and could introduce additional legal and operational risks[139] Environmental and Legal Compliance - The company may incur significant costs related to compliance with environmental laws and regulations, which could adversely affect its financial position and cash flows[155] - The company is subject to various legal proceedings that could result in fines, penalties, or other damages, potentially impacting its financial results[154] - Environmental costs related to hazardous materials and compliance with regulations could have a material adverse effect on the company's financial position[156] - Disruptions caused by natural disasters and environmental events could materially affect the company's financial position and results of operations[141] Financial Performance and Position - Total sales and service revenues for 2024 were $11,535 million, a slight increase of 0.7% compared to $11,454 million in 2023[357] - Product sales decreased to $7,464 million in 2024 from $7,664 million in 2023, representing a decline of 2.6%[357] - Service revenues increased to $4,071 million in 2024, up 7.4% from $3,790 million in 2023[357] - Operating income for 2024 was $535 million, down 31.5% from $781 million in 2023[357] - Net earnings for 2024 were $550 million, a decrease of 19.2% compared to $681 million in 2023[357] - Basic earnings per share for 2024 were $13.96, down from $17.07 in 2023, reflecting a decline of 18.4%[357] - Cash and cash equivalents increased significantly to $831 million in 2024 from $430 million in 2023, marking a growth of 93.5%[359] - Total assets rose to $12,141 million in 2024, an increase of 8.2% from $11,215 million in 2023[359] - The company reported a comprehensive income of $944 million for 2024, an increase of 10% from $858 million in 2023[357] Liabilities and Capital Management - Total current liabilities decreased to $2,991 million in 2024 from $3,032 million in 2023, a reduction of 1.4%[361] - Long-term debt increased to $2,700 million in 2024, up from $2,214 million in 2023, representing a 21.9% increase[361] - Total liabilities increased to $7,475 million in 2024, up from $7,122 million in 2023, a rise of 4.9%[361] - The company has a $1.7 billion credit facility and a $1.7 billion commercial paper program, with no indebtedness outstanding as of December 31, 2024[337] Shareholder Returns and Dividends - Dividends declared increased to $5.25 per share in 2024, up from $5.02 per share in 2023[365] - The quarterly cash dividend was increased from $1.30 per share to $1.35 per share in November 2024, with total cash dividends paid of $206 million in 2024[428] - The company's ability to pay dividends or repurchase shares is subject to limitations and the discretion of the board of directors[182] Segment Performance and Revenue Recognition - The company has three reportable segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Mission Technologies, focusing on defense and naval shipbuilding[369] - Revenue recognition for shipbuilding contracts is based on a cost-to-cost input method, reflecting performance progress over time[439] - The Mission Technologies segment also derives most of its revenue from U.S. Government contracts, structured as either IDIQ or standalone contracts[440] - Contract modifications due to unpriced change orders are routinely made and accounted for as contract modifications when approved[437] - The company invoices and receives payments based on performance progress, typically no less frequently than monthly[435]

Core Viewpoint - Huntington Ingalls Industries, Inc. (HII) reported a significant decline in earnings and revenues for the fourth quarter of 2024, attributed to poor sales performance across all business segments and a decrease in operating income compared to the previous year [1][2][3]. Financial Performance - Fourth-quarter 2024 earnings per share (EPS) were $3.15, down 54.3% from $6.90 in the prior-year quarter, and missed the Zacks Consensus Estimate of $3.28 by 4% [1][2]. - Total revenues for the quarter were $3 billion, missing the Zacks Consensus Estimate of $3.03 billion by 0.9%, and declined 5.4% from $3.18 billion in the year-ago quarter [3]. - For the full year 2024, HII's EPS was $13.96, missing the Zacks Consensus Estimate of $14.09 and down from $17.07 reported in the previous year [2]. Operational Performance - Segmental operating income for the fourth quarter was $103 million, a decrease from $330 million in the fourth quarter of 2023, with an operating margin contraction of 696 basis points to 3.4% [4]. - The decline in operating income was primarily due to lower performance at the Newport News Shipbuilding unit and the absence of prior year benefits from court judgments and insurance settlements [5]. Segmental Performance - Newport News Shipbuilding reported revenues of $1.59 billion, down 4.6% year over year, with operating earnings of $38 million, a decline of 65.5% [6][7]. - Ingalls Shipbuilding revenues totaled $736 million, down 8% year over year, with operating income plunging 72.8% to $46 million [7][8]. - Mission Technologies segment revenues were $713 million, down 4.3% year over year, with operating income declining 62.7% to $19 million [8][9]. Financial Update - As of December 31, 2024, cash and cash equivalents totaled $831 million, up from $430 million a year ago, while long-term debt increased to $2.70 billion from $2.21 billion [10]. - Cash flow from operating activities was $393 million, down from $970 million in the previous year, and free cash flow was $40 million compared to $692 million in the prior-year period [10]. 2025 Guidance - For 2025, HII expects shipbuilding revenues to be in the range of $8.9-$9.1 billion and Mission Technologies revenues to be between $2.9-$3.1 billion [11]. - The company projects free cash flow to be in the band of $300-$500 million [11].

Huntington Ingalls (HII) reported $3 billion in revenue for the quarter ended December 2024, representing a year-over-year decline of 5.5%. EPS of $3.15 for the same period compares to $6.90 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $3.03 billion, representing a surprise of -0.88%. The company delivered an EPS surprise of -3.96%, with the consensus EPS estimate being $3.28.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- an ...

Huntington Ingalls (HII) came out with quarterly earnings of $3.15 per share, missing the Zacks Consensus Estimate of $3.28 per share. This compares to earnings of $6.90 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.96%. A quarter ago, it was expected that this shipbuilder would post earnings of $3.84 per share when it actually produced earnings of $2.56, delivering a surprise of -33.33%.Over the last four quarters, the c ...