It was a very difficult choice. And we had the four very good contenders both Germany, France, UK and the Americans, close allies to Norway, all four. But it was a decision with a lot of factors. So we decided to go with with the Brits because in the end it was a lot of factors. So we decided it.So are you worried at all about Norway's Navy needing the capabilities before 2030, which is when deliveries are due to start. No, we all already have frigates, but we want to exchange them with the new frigates. So ...

Core Insights - Huntington Ingalls Industries (HII) reported strong earnings results for Q2 2025, with GAAP revenue of $3.08 billion, exceeding analyst estimates, and GAAP earnings per share of $3.86, beating forecasts by 17.7% [1][5][11] - Despite the revenue outperformance, operating and segment income decreased year-over-year due to cost and margin pressures [1][5][12] - The company reaffirmed its full-year outlook, indicating confidence in future performance [1][11] Financial Performance - GAAP revenue increased by 3.4% year-over-year from $2.98 billion in Q2 2024 to $3.08 billion in Q2 2025 [2] - GAAP earnings per share decreased by 11.9% from $4.38 in Q2 2024 to $3.86 in Q2 2025 [2] - Operating income fell by 13.8% year-over-year to $163 million, while segment operating income dropped by 15.3% to $172 million [2] Business Segments - Ingalls Shipbuilding saw a 1.7% revenue increase, but segment operating margin decreased to 7.5% from 7.9% [6] - Newport News Shipbuilding experienced the highest revenue growth, but segment operating income declined significantly due to delays and performance issues [7] - The Mission Technologies division reported 3.4% revenue growth, with slight margin decline attributed to technology development costs [8] Contract and Backlog - New contract awards reached $11.9 billion, increasing the total backlog to a record $56.9 billion as of June 30, 2025 [9] - Major new orders were secured for submarine and destroyer programs, indicating strong future work visibility [9] Cash Flow and Dividends - Free cash flow turned positive at $730 million (non-GAAP), a significant improvement from a negative $99 million in the previous year [2][10] - The quarterly dividend increased by 3.8% to $1.35 per share from $1.30 in Q2 FY2024 [10] Future Guidance - For fiscal 2025, management expects Shipbuilding revenue between $8.9 billion and $9.1 billion, with non-GAAP operating margins of 5.5% to 6.5% [11] - The technology segment is projected to generate revenue of $2.9 billion to $3.1 billion, with operating margins of 4.0% to 4.5% [11] - Free cash flow guidance was raised to $500 million–$600 million, reflecting improved operational performance [11]

Financial Data and Key Metrics Changes - The company reported earnings of $3.74 per diluted share on revenue of $13 billion, with operating earnings of $1.3 billion and net income slightly over $1 billion, reflecting an 8.9% revenue increase year-over-year [5][6] - Operating earnings increased by almost 13%, net earnings rose by 12%, and earnings per share grew by 14.7% compared to the previous year [6] - Year-to-date revenue reached $25.3 billion, up 11.3%, with operating earnings nearly $2.6 billion, up 17.4%, and earnings per share up $1.26 or 20.5% [6] Business Segment Data and Key Metrics Changes - Aerospace segment revenue was $3.06 billion, a 4.1% increase, with operating earnings of $403 million, up 26.3% year-over-year [15] - Marine segment revenue increased by 22.2% to $4.22 billion, with operating earnings of $291 million, up 18.8% quarter-over-quarter [27] - Combat Systems revenue was flat at $2.28 billion, but operating earnings increased by 3.5% to $324 million, with a book-to-bill ratio of 1.0 for the quarter [30][31] - Technologies segment revenue was $3.5 billion, up 5.5%, with earnings of $332 million, up 3.8% [35] Market Data and Key Metrics Changes - The company ended the quarter with a record backlog of $103.7 billion, up 14% from the previous year, and total estimated contract value reached over $160 billion [9][10] - The marine systems segment saw significant growth driven by contracts for submarine construction, particularly for Columbia and Virginia class submarines [27][28] Company Strategy and Development Direction - The company aims to optimize operating leverage across all business units, focusing on continuous improvement and cash generation [43][44] - Management emphasized the importance of stabilizing the supply chain and improving productivity in the marine segment to enhance margins [70][71] - The company plans to maintain its business structure while enhancing operational performance, particularly in areas with challenges [81][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong second half of the year, with expectations for improved cash conversion rates and continued demand across all segments [11][49] - The company anticipates revenue growth in aerospace and marine segments, while combat systems and technologies are expected to maintain stable performance [46][47][48] Other Important Information - The effective tax rate for the quarter was 17.7%, slightly lower than the full-year outlook of around 17.5% [13][14] - The company refinanced $750 million of notes that matured in May, with no further debt maturities until next year [12] Q&A Session Summary Question: Could you elaborate on the G800 delivery cadence? - The first G800 is expected to deliver soon, with incremental margins expected to improve as production progresses through different lots [54][55] Question: What is driving the slowdown in services? - The slowdown is attributed to the mix of services and volume, with expectations for continued growth aligned with the fleet [58][60] Question: Can you comment on the management reorganization? - The management structure will remain largely the same, focusing on value creation and operational performance across all business units [80][81] Question: What is the margin potential for the portfolio moving forward? - There is potential for margin improvement, particularly in the marine group, with a focus on operational performance [88][90] Question: Is there enough skilled labor for electric boat to handle additional Virginia class submarines? - Skilled labor is not an issue, and the company can support additional growth with some capital investment if required [113]

Group 1: Deere (DE) - Deere's stock has increased over 16% year-to-date, driven by optimism regarding easing trade tensions [3] - The company reported a first-quarter net income of $869 million, with a full-year forecast of $5 billion to $5.5 billion, but faced a 30% revenue decline and a 50% drop in net income compared to the previous year [5] - Deere's supply chain is relatively protected against tariffs due to domestic manufacturing, and the company is expected to address supply chain adjustments in its upcoming earnings call [9] Group 2: Energy Transfer (ET) - Energy Transfer has a distribution yield of 7.5% and plans to invest $5 billion in growth capital expenditures in 2025, significantly higher than its maintenance capital expenditures of $1.1 billion [12] - The company is in discussions to develop a large LNG export facility in Lake Charles, Louisiana, which could enhance its position in the energy market [13] - The current administration's business-friendly policies are expected to support the development of U.S. energy assets, benefiting companies like Energy Transfer [11] Group 3: Huntington Ingalls Industries (HII) - Huntington Ingalls' shares have risen over 20% in 2025, contrasting with a nearly 4% dip in the S&P 500, and the company offers a forward yield of 2.3% [14] - The company reported first-quarter revenue of $2.7 billion, below expectations, but exceeded earnings estimates with an EPS of $3.79 [15] - Management reaffirmed a 2025 forecast of shipbuilding revenue between $8.9 billion and $9.1 billion, alongside a free cash flow projection of $300 million to $500 million [16]

Group 1 - More than two dozen high school seniors have accepted job offers to start their shipbuilding careers at HII's Newport News Shipbuilding division [1] - The Newport News Shipbuilding division participated in the NHREC Good Life Solution Program's Career Selection Day, where 18 students accepted employment offers for full-time positions or apprenticeships [2] - The Apprentice School offers tuition-free apprenticeships in 19 trades and seven optional programs, funded by HII to develop the next generation of shipbuilders [2][4] Group 2 - The Good Life Solution Program aims to enhance recruitment, hiring, training, and retention of entry-level hires from high schools through partnerships between NHREC and local employers [3] - A ceremony was held to recognize students from the Youth Builders program, with 13 students accepting offers to attend The Apprentice School [4] - HII's mission is to deliver powerful ships and all-domain solutions to support national security, with a workforce of 44,000 [7][8]

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]