Will Margin Performance Aid Huntington Ingalls' Q3 Earnings?

Core Viewpoint - Huntington Ingalls Industries, Inc. (HII) is expected to report solid third-quarter 2024 earnings driven by strong revenue performance across its business segments, particularly in shipbuilding, with an anticipated earnings per share of $3.84, reflecting a 3.8% increase year-over-year [1][5]. Group 1: Revenue Performance - The Ingalls unit is projected to achieve third-quarter revenues of $742 million, indicating a growth of 4.4% compared to the same quarter last year, primarily due to higher revenues from surface combatants and amphibious assault ships [2]. - The Newport News unit is expected to report revenues of $1.51 billion for the third quarter, representing a 3.8% increase from the previous year, driven by higher volumes from the Columbia-class submarine program [3]. - The Mission Technologies unit is likely to see revenue growth due to increased sales from C5ISR and cyber, electronic warfare, and space contracts, with recent deliveries of uncrewed underwater vehicles contributing to performance [4]. Group 2: Overall Financial Estimates - The overall sales estimate for HII in the third quarter is pegged at $2.88 billion, suggesting a 2.2% increase from the prior-year figure, supported by solid sales expectations across most business segments [5]. - The company has a four-quarter average earnings surprise of 26.17%, indicating a history of exceeding earnings expectations [1]. Group 3: Earnings Prediction Model - The current Earnings ESP for HII stands at -0.69%, and it holds a Zacks Rank of 3 (Hold), suggesting that the model does not predict a definitive earnings beat for this quarter [6].