Huntington Ingalls Q4 Earnings Miss Estimates, Revenues Decline Y/Y

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].