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Huntington Ingalls Unit Wins $41M Navy Contract for CVN 73
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Huntington Ingalls Industries, Inc.’s (HII - Free Report) unit, Newport News Division, has clinched a modification contract from the U.S. Navy for advance planning of the refueling complex overhaul (“RCOH”) of the USS George Washington (CVN 73).
Details of the Contract
The contract has been valued at $41.0 million. It was awarded by the Naval Sea Systems Command, Washington, D.C.
Per the latest modification, Huntington Ingalls will provide additional supplemental materials and increased efforts during the second and third years of advance planning. It also covers the supply of the materials and efforts for RCOH pre-planning as well as shipcheck support for the USS John C. Stennis (CVN 74).
Work is scheduled to be complete by Aug 2017 and will be performed in Newport News, VA. It will use fiscal 2014, 2015, 2016, and 2017 shipbuilding and conversion (Navy) funds.
About USS George Washington
USS George Washington (CVN 73), the Navy’s nuclear-powered aircraft carrier, was built by Newport News Division and commissioned in Jul 1992. It is the sixth carrier in the Nimitz class and this super carrier has room for around 90 planes. It can reach speeds of more than 30 knots and is powered by two Westinghouse A4W nuclear reactors. It can travel over 3,000,000 nautical miles before needing to refuel.
Huntington — a Key Defense Operator
Huntington Ingalls is the prime industrial employer in Virginia. Over 70% of the active Navy fleet consists of Huntington Ingalls ships. Through its Newport News segment, the company operates as the nation's sole designer, builder and refueler of nuclear-powered aircraft carriers. Apart from General Dynamics Corp. (GD - Free Report) , it is the only company designing and building nuclear-powered submarines for the Navy.
Prospects of the shipbuilding business continue to be bright, backed by the implementation of the fiscal 2016 budget and the fiscal 2017 proposal. The proposed fiscal 2017 budget allocates $582.7 billion to the U.S. Department of Defense, comprising $71.4 billion for research & development and $8.1 billion for submarines.
The fiscal 2017 budget proposal includes Ohio-Class replacement, advanced procurement for refueling CVN-74, advanced procurement for CVN-80, two Virginia class submarines, two DDG-51s, advanced procurement for LHA-8 and TAO(X), continuation of CVN-79, and investment in a new Coast Guard Icebreaker. This indicates that the company is well positioned for long-term growth. Besides, multi-year stability in shipbuilding would likely lead to robust cash flows.
In addition to these, the victory of Donald Trump in the Presidential race bodes well for Aerospace and Defense sector companies like Huntington Ingalls, Lockheed Martin Corp. (LMT - Free Report) and Boeing Co. (BA - Free Report) as it has lifted expectations of increased military spending. A moderate flow of funds from the Pentagon added to the optimism.
Price Movement
Huntington Ingalls’ stock has improved about 38.3% in the last one year, outperforming the Zacks Categorized Aerospace/Defense industry’s gain of 11.2%. This could be because the company continues to win contracts from the Pentagon and other customers.
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Huntington Ingalls Unit Wins $41M Navy Contract for CVN 73
Huntington Ingalls Industries, Inc.’s (HII - Free Report) unit, Newport News Division, has clinched a modification contract from the U.S. Navy for advance planning of the refueling complex overhaul (“RCOH”) of the USS George Washington (CVN 73).
Details of the Contract
The contract has been valued at $41.0 million. It was awarded by the Naval Sea Systems Command, Washington, D.C.
Per the latest modification, Huntington Ingalls will provide additional supplemental materials and increased efforts during the second and third years of advance planning. It also covers the supply of the materials and efforts for RCOH pre-planning as well as shipcheck support for the USS John C. Stennis (CVN 74).
Work is scheduled to be complete by Aug 2017 and will be performed in Newport News, VA. It will use fiscal 2014, 2015, 2016, and 2017 shipbuilding and conversion (Navy) funds.
About USS George Washington
USS George Washington (CVN 73), the Navy’s nuclear-powered aircraft carrier, was built by Newport News Division and commissioned in Jul 1992. It is the sixth carrier in the Nimitz class and this super carrier has room for around 90 planes. It can reach speeds of more than 30 knots and is powered by two Westinghouse A4W nuclear reactors. It can travel over 3,000,000 nautical miles before needing to refuel.
Huntington — a Key Defense Operator
Huntington Ingalls is the prime industrial employer in Virginia. Over 70% of the active Navy fleet consists of Huntington Ingalls ships. Through its Newport News segment, the company operates as the nation's sole designer, builder and refueler of nuclear-powered aircraft carriers. Apart from General Dynamics Corp. (GD - Free Report) , it is the only company designing and building nuclear-powered submarines for the Navy.
Prospects of the shipbuilding business continue to be bright, backed by the implementation of the fiscal 2016 budget and the fiscal 2017 proposal. The proposed fiscal 2017 budget allocates $582.7 billion to the U.S. Department of Defense, comprising $71.4 billion for research & development and $8.1 billion for submarines.
The fiscal 2017 budget proposal includes Ohio-Class replacement, advanced procurement for refueling CVN-74, advanced procurement for CVN-80, two Virginia class submarines, two DDG-51s, advanced procurement for LHA-8 and TAO(X), continuation of CVN-79, and investment in a new Coast Guard Icebreaker. This indicates that the company is well positioned for long-term growth. Besides, multi-year stability in shipbuilding would likely lead to robust cash flows.
In addition to these, the victory of Donald Trump in the Presidential race bodes well for Aerospace and Defense sector companies like Huntington Ingalls, Lockheed Martin Corp. (LMT - Free Report) and Boeing Co. (BA - Free Report) as it has lifted expectations of increased military spending. A moderate flow of funds from the Pentagon added to the optimism.
Price Movement
Huntington Ingalls’ stock has improved about 38.3% in the last one year, outperforming the Zacks Categorized Aerospace/Defense industry’s gain of 11.2%. This could be because the company continues to win contracts from the Pentagon and other customers.
Zacks Rank & Key Picks
Huntington Ingalls currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>