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Huntington Ingalls (HII) Q1 Earnings Top Estimates, Up Y/Y

Huntington Ingalls Industries ' HII first-quarter 2016 adjusted earnings of $2.87 per share surpassed the Zacks Consensus Estimate of $2.11 by 36%.

Reported earnings also surged 60.3% from in the year-ago figure of $1.79. The upside was primarily driven by strong contribution from its Ingalls Shipbuilding division.

Total Revenue

Total revenue in the first quarter was $1,763 million, ahead of the Zacks Consensus Estimate of $1,591 million and 12.3% higher than the year-ago figure of $1,570 million.

Segment Details

Newport News Shipbuilding: Segment revenues were $1,153 million, up 8.7% year over year on the back of higher sales of Energy and Submarines, partially offset by lower revenues from Aircraft Carriers. Segment operating income declined 4.3% owing to lower risk retirement on the VCS program, lower volume on the execution contract for the CVN-72 USS Abraham Lincoln RCOH, and weak performance of CVN-78 Gerald R. Ford, partially offset by higher performance of fleet support services.

Ingalls Shipbuilding: Segment revenues were $586 million, up 24.9% year over year. The upside was primarily driven by higher revenues from Surface Combatants and Amphibious Assault Ships, partially offset by lower revenues from the Legend-class National Security Cutter (NSC) program. Operating income in the segment increased 82.2% due to higher risk retirement, and improved performance on the LPD and DDG programs.

Other: Segment revenues were $24 million, down 40% year over year. The segment incurred an operating loss of $5 million, narrower than the year-ago loss of $10 million.

Backlog

The company received new orders worth $1 billion and exited the quarter with a total backlog of $21.3 billion.

Financial Update

Cash & cash equivalents as of Mar 31, 2016 were $793 million, down from $894 million as of Dec 31, 2015.

Long-term debt as of Mar 31, 2016 was $1,275 million, up from the 2015-end level of $1,273 million.

Cash from operating activities in the first quarter was $54 million, compared with $10 million in the year-ago period.

Other Defense Releases

Textron Inc. TXT reported first-quarter 2016 earnings from continuing operations of 55 cents per share, beating the Zacks Consensus Estimate of 53 cents by 3.8%. Earnings also surged 19.6% from 46 cents reported in the year-ago quarter.

Lockheed Martin Corp. LMT reported adjusted first-quarter 2016 earnings of $2.58 per share, surpassing the Zacks Consensus Estimate of $2.51 by 2.8%. Earnings, however, fell 5.8% from the year-ago level.

General Dynamics Corporation GD announced first-quarter 2016 earnings from continuing operations of $2.34 per share, comfortably surpassing the Zacks Consensus Estimate and higher than the year-ago figure of $2.14 by 9.3%.

Zacks Rank

Huntington Ingalls Industries currently has a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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