The U.S. shipbuilding industry has been in a lull since the height of the pandemic, with companies tied to pre-COVID contracts that are not nearly as profitable now.But the budget winds in Washington appear to be shifting, and Huntington Ingalls Industries (HII -1.06%) is likely to be one of the primary beneficiaries if they do. Shares of Huntington Ingalls traded up 12.9% in April, according to data provided by S&P Global Market Intelligence, as investors begin to climb on board for what they believe will ...

Core Points - Huntington Ingalls Industries, Inc. (HII) reported first-quarter 2025 earnings of $3.79 per share, a decline of 2.1% from $3.87 in the prior-year quarter, but exceeded the Zacks Consensus Estimate of $2.90 by 30.7% [1] - Total revenues for the quarter were $2.73 billion, missing the Zacks Consensus Estimate of $2.79 billion by 2% and declining 2.5% from $2.81 billion in the year-ago quarter due to lower sales volume across all business segments [2] Operational Performance - Segmental operating income was $171 million, slightly up from $170 million in the first quarter of 2024, with an operating margin expansion of 19 basis points to 6.3% [3] - The increase in operating income was mainly driven by better performance in the Newport News Shipbuilding and Mission Technologies units [3] Orders and Backlog - HII received orders worth $2.1 billion in the first quarter of 2025, resulting in a total backlog of $48 billion as of March 31, 2025, down from $48.7 billion as of December 31, 2024 [4] Segmental Performance - Newport News Shipbuilding: Revenues totaled $1.40 billion, down 2.6% year over year, with operating income of $85 million, up 3.7% year over year due to contract incentives from the Virginia-class submarine program [5] - Ingalls Shipbuilding: Revenues were $637 million, down 2.7% year over year, with operating earnings of $46 million, down 23.3% year over year due to lower performance in amphibious assault ships [6] - Mission Technologies: Revenues totaled $735 million, down 2% year over year, with operating income increasing 42.9% year over year to $40 million, driven by higher performance in cyber, electronic warfare & space, and uncrewed systems [6][7] Financial Update - Cash and cash equivalents as of March 31, 2025, were $167 million, significantly down from $831 million as of December 31, 2024 [8] - Long-term debt remained at $2.70 billion as of March 31, 2025, consistent with the end of 2024 [8] - Cash used in operating activities was $395 million compared to $202 million a year ago [8] - Free cash outflow was $462 million in the first quarter of 2025, higher than $274 million in the prior-year period [9] 2025 Guidance - HII reaffirmed its 2025 guidance, expecting shipbuilding revenues in the range of $8.9-$9.1 billion and Mission Technologies revenues in the range of $2.9-$3.1 billion [10] - The company projects free cash flow to be between $300-$500 million [10]

Core Insights - HII's Ingalls Shipbuilding hosted a "signing day" for 43 graduates of its Shipbuilder Academy, marking the start of their careers with the company [1][6] - The event coincided with National Apprenticeship Day, emphasizing the importance of connecting individuals to meaningful careers and building a skilled workforce [2] - The Ingalls Shipbuilder Academy provides hands-on training, mentorship, and classroom instruction to prepare students for careers in shipbuilding [2][3] Company Initiatives - The Ingalls Shipbuilder Academy has graduated over 450 students since its inception in 2016, demonstrating the company's commitment to investing in local workforce development [9] - Ingalls has partnerships with 13 high schools along the Gulf Coast to nurture a talent pipeline for future shipbuilders [9] - In addition to the Shipbuilder Academy, Ingalls supports technical programs at three local high schools, further enhancing educational opportunities for students [10] Student Impact - Graduates like Tommie Bettis and Randi Vickers expressed pride in their new roles, highlighting the personal significance of joining Ingalls and continuing family traditions in skilled trades [7][8] - The signing ceremony resembled traditional athletic signing events, showcasing the importance of these career opportunities for students [6]

Financial Data and Key Metrics Changes - First quarter revenue was $2.7 billion, a decrease of 2.5% compared to the same period last year [17] - Earnings per share for the quarter was $3.79, down from $3.87 in the first quarter of 2024 [20] - Consolidated operating income increased by $7 million or 4.5% from the first quarter of 2024, totaling $161 million [20] - The backlog at the end of the quarter was $48 billion, with approximately $28 billion currently funded [12] Business Line Data and Key Metrics Changes - Ingalls Shipbuilding revenue decreased by 2.7% to $637 million, primarily due to lower volume on amphibious assault ships [17] - Newport News revenue decreased by 2.6% to $1.4 billion, driven by lower volumes in aircraft carriers and naval nuclear support services, partially offset by higher volumes in the Columbia Class submarine program [17] - Mission Technologies revenue decreased by 2% to $735 million, primarily due to lower volume in C5ISR [18] Market Data and Key Metrics Changes - The company expects to achieve more than $50 billion in new awards across 2025 and 2026, supported by government funding for shipbuilding programs [14] - The administration's focus on defense priorities aligns with the company's strategic initiatives [7] Company Strategy and Development Direction - The company aims to enhance shipbuilding throughput by 20% year over year and has set a goal of $250 million in annualized cost reductions by year-end [4][6] - Strategic partnerships, such as the MOU with HD Hyundai Heavy Industries, are being explored to accelerate ship production [11] - The company is focusing on leveraging new technologies and working with the Rapid Capabilities Office to enhance defense capabilities [7][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational initiatives and the expected improvement in throughput over the year [15] - The company anticipates top-line growth with a forecast of $15 billion in revenue by 2030, along with margin normalization in free cash flow [16] - Management acknowledged challenges but remains confident in the execution of pre-COVID contracts and transitioning to post-COVID contracts [15] Other Important Information - The company celebrated the graduation of 15 apprentices, indicating a focus on workforce development [13] - The company has not repurchased any shares during the quarter but paid a cash dividend of $1.35 per share [22] Q&A Session Summary Question: How to convert additional funding into a plan for Virginia class and infrastructure needs? - Management highlighted the importance of the FY 2024 two-boat contract and targeted investments to increase submarine build rates [31][34] Question: Details on the new cost-plus contract for Virginia Class? - The new contract is a hybrid cost-type contract that balances affordability and profitability [43] Question: Why is Ingalls' margin declining? - Management noted that the decline is due to pressures on amphibious assault ship programs and timing of incentives [46][49] Question: Update on workforce trends and attrition? - The company hired 1,000 employees in Q1, with attrition improving but not yet back to pre-COVID levels [75] Question: Impact of the new contract on cash flow guidance? - The new contract was included in the cash flow guidance for Q2, with expectations for incentives [85][87] Question: Future of international partnerships in shipbuilding? - Management sees potential in partnerships to expand capacity and improve efficiency in shipbuilding [90][92] Question: Timing of transition from pre-COVID to post-COVID contracts? - Management expects to hit the 50% mark in 2027, with no significant changes to milestones [98] Question: Wage adjustments and their impact on attrition? - Attrition improvement is attributed to hiring experienced labor rather than broad wage adjustments [115] Question: Demand for unmanned products? - Demand for uncrewed underwater vehicles is strong, with significant backlog and positive developments [125]

Q1 2025 Earnings Call Chris Kastner President and CEO Tom Stiehle EVP and CFO May 1, 2025 Cautionary Statement Regarding Forward-looking Statements 2 HII INVESTMENT THESIS Largest U.S. military seapower provider with leading all-domain, integrated defense Over the next ~20 months: Mid to Long Term: Q1 2025 EARNINGS 3 1 Non-GAAP measure. See appendix for definitions and reconciliations. Statements in this presentation and in our other filings with the SEC, as well as other statements we may make from time to ...

NEWPORT NEWS, Va., May 01, 2025 (GLOBE NEWSWIRE) -- HII (NYSE: HII) today reported results for the first quarter of fiscal 2025. Highlights First quarter revenues were $2.7 billionFirst quarter net earnings were $149 million or $3.79 diluted earnings per shareNew contract awards of $2.1 billion, resulting in backlog of $48 billionCompany reaffirms previously issued financial guidance1 First Quarter ResultsFirst quarter 2025 revenues of $2.7 billion were down 2.5% from the first quarter of 2024, driven by lo ...

GROTON, Conn., April 30, 2025 /PRNewswire/ -- General Dynamics Electric Boat, a business unit of General Dynamics (NYSE: GD), announced today it has been awarded a total of $12.4 billion in contract modifications for construction of two fiscal year 2024 Virginia-class submarines. Additionally, the award funds investments to improve productivity at the shipyards and workforce support as detailed in the Department of Defense contract award announcement (https://www.defense.gov/News/Contracts/Contract/Article/ ...

Core Viewpoint - General Dynamics Electric Boat has been awarded $12.4 billion in contract modifications for the construction of two Virginia-class submarines, with potential cumulative value reaching $17.2 billion if options are exercised [1][3] Group 1: Contract Details - The contract modifications include funding for productivity improvements at shipyards and workforce support [1] - The total contract value could increase to $17.2 billion if all options are exercised [1] Group 2: Company and Industry Role - General Dynamics Electric Boat is the prime contractor and lead design yard for the Virginia-class submarine series, collaborating with HII's Newport News Shipbuilding [3] - The Virginia-class submarines are designed for a full range of 21st-century mission requirements, including anti-submarine warfare and special operations support [3] - General Dynamics Electric Boat employs over 24,000 people and is headquartered in Groton, Connecticut [4] Group 3: Company Overview - General Dynamics is a global aerospace and defense company with a diverse portfolio, generating $47.7 billion in revenue in 2024 and employing over 110,000 people worldwide [5]

NEWPORT NEWS, Va., April 30, 2025 (GLOBE NEWSWIRE) -- HII (NYSE: HII) announced today that the Virginia-class shipbuilding team, which includes the company’s Newport News Shipbuilding (NNS) division, has been awarded a contract modification in support of construction of two fiscal year 2024 Block V submarines. The contract modification, to NNS and teaming partner General Dynamics Electric Boat, authorizes construction of the 11th and 12th fast-attack submarines of the Block V contract. “We appreciate the te ...

Core Points - HII, the largest military shipbuilder in the U.S., is launching a "Build It" campaign featuring 15-second television advertisements to promote American manufacturing in support of national defense [1][2] - The campaign highlights the importance of U.S.-built Navy ships, submarines, and advanced technologies, aiming to revitalize American manufacturing and strengthen the defense industrial base [4][10] - HII's President and CEO, Chris Kastner, emphasizes the campaign's role in recognizing the contributions of those in the shipbuilding industry and its impact on national security [3][4] Company Initiatives - HII is actively recruiting talent for shipbuilding and developing the next generation of skilled professionals through rigorous apprenticeship programs across its divisions [7][8] - The apprenticeship programs combine hands-on training, academic coursework, and real-world experience, aiming to create a skilled workforce for the shipbuilding industry [8] - HII offers competitive wages, paid training, and long-term career opportunities across its three divisions, promoting a strong sense of purpose among employees [9] Industry Context - The "Build It" campaign is part of a broader effort to meet the increased demand for ships and technologies from the U.S. Navy and enhance national defense capabilities [4][10] - HII's workforce consists of 44,000 employees, and the company has a history of over 135 years in advancing U.S. national security through various defense solutions [11][12]