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Huntington Ingalls Hits 52-Week High on Impressive Earnings
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Shares of Huntington Ingalls Industries, Inc. (HII - Free Report) touched a new 52-week high of $213.65 on Feb 20, before closing at $211.91. The largest U.S. military shipbuilder’s stock has surged about 57.5% in the last one year, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 30.1% over the same time frame.
Huntington Ingalls has a market cap of $9.83 billion. Over the past 52 weeks, the company’s shares have ranged from a low of $129.53 to a high of $213.65. Average volume of shares traded over the last three months is approximately 0.5 million.
What’s Driving Huntington Ingalls?
Huntington Ingalls is the sole designer and manufacturer of nuclear-powered aircraft carriers in the U.S. The company is also the prime industrial employer in Virginia. More than 70% of the active U.S. Navy fleet consists of Huntington Ingalls ships.
Recently, the company reported its fourth-quarter 2016 and full-year results wherein quarterly earnings came in at $3.67 per share, surpassing the Zacks Consensus Estimate of $2.48 by 48%. Earnings also improved 88.2% from $1.95 per share in the year-ago quarter, driven by substantial top line as well as operating income growth. Moreover, full-year earnings came in at $10.15, up 38.5% year over year.
Revenues in the fourth quarter were $1.92 billion, above the Zacks Consensus Estimate of $1.85 billion. The top line also improved 0.9% from the year-ago figure of $1.91 billion. The upside was primarily driven by higher contribution from its Ingalls and Technical Solutions divisions. Full-year revenues were $7.07 billion, up 0.7% year over year. Again, Huntington Ingalls received new orders worth $5.2 billion, as a result of which its total backlog reached to $21 billion as of Dec 31, 2016.
The company focuses on maximizing shareholder value through both share repurchases and incremental dividend payouts. In 2016, the company paid $98 million as dividends, up from $81 million a year ago. Also, Huntington Ingalls has repurchased common stock worth $194 million during 2016.
Furthermore, the shipbuilding business prospects continue to be bright on the budget for fiscal-2017. Notably, the proposed 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. This indicates that the company is well positioned for long-term growth. Besides, its multi-year stability in shipbuilding would likely lead to robust cash flows.
In addition to these positives, 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) , Boeing Co. (BA - Free Report) and Northrop Grumman Corp. (NOC - Free Report) as it has lifted expectations of increased military spending. A moderate flow of funds from the Pentagon also added to the optimism.
Huntington Ingalls Industries, Inc. Price and Consensus
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Huntington Ingalls Hits 52-Week High on Impressive Earnings
Shares of Huntington Ingalls Industries, Inc. (HII - Free Report) touched a new 52-week high of $213.65 on Feb 20, before closing at $211.91. The largest U.S. military shipbuilder’s stock has surged about 57.5% in the last one year, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 30.1% over the same time frame.
Huntington Ingalls has a market cap of $9.83 billion. Over the past 52 weeks, the company’s shares have ranged from a low of $129.53 to a high of $213.65. Average volume of shares traded over the last three months is approximately 0.5 million.
What’s Driving Huntington Ingalls?
Huntington Ingalls is the sole designer and manufacturer of nuclear-powered aircraft carriers in the U.S. The company is also the prime industrial employer in Virginia. More than 70% of the active U.S. Navy fleet consists of Huntington Ingalls ships.
Recently, the company reported its fourth-quarter 2016 and full-year results wherein quarterly earnings came in at $3.67 per share, surpassing the Zacks Consensus Estimate of $2.48 by 48%. Earnings also improved 88.2% from $1.95 per share in the year-ago quarter, driven by substantial top line as well as operating income growth. Moreover, full-year earnings came in at $10.15, up 38.5% year over year.
Revenues in the fourth quarter were $1.92 billion, above the Zacks Consensus Estimate of $1.85 billion. The top line also improved 0.9% from the year-ago figure of $1.91 billion. The upside was primarily driven by higher contribution from its Ingalls and Technical Solutions divisions. Full-year revenues were $7.07 billion, up 0.7% year over year. Again, Huntington Ingalls received new orders worth $5.2 billion, as a result of which its total backlog reached to $21 billion as of Dec 31, 2016.
The company focuses on maximizing shareholder value through both share repurchases and incremental dividend payouts. In 2016, the company paid $98 million as dividends, up from $81 million a year ago. Also, Huntington Ingalls has repurchased common stock worth $194 million during 2016.
Furthermore, the shipbuilding business prospects continue to be bright on the budget for fiscal-2017. Notably, the proposed 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. This indicates that the company is well positioned for long-term growth. Besides, its multi-year stability in shipbuilding would likely lead to robust cash flows.
In addition to these positives, 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) , Boeing Co. (BA - Free Report) and Northrop Grumman Corp. (NOC - Free Report) as it has lifted expectations of increased military spending. A moderate flow of funds from the Pentagon also added to the optimism.
Huntington Ingalls Industries, Inc. Price and Consensus
Huntington Ingalls Industries, Inc. Price and Consensus | Huntington Ingalls Industries, Inc. Quote
Zacks Rank
Huntington Ingalls currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>