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Huntington Ingalls (HII) Misses Q1 Earnings, Sales Drop Y/Y
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Huntington Ingalls Industries, Inc. (HII - Free Report) first-quarter 2017 adjusted earnings of $1.87 per share missed the Zacks Consensus Estimate of $2.72 by 31.3%.
Adjusted earnings also declined 21.4% from $2.38 per share in the year-ago quarter owing to a decline in the top line and operating income. Barring the adjustment, the company’s reported earnings came in at $2.56 per share, reflecting a year-over-year deceleration of 10.8%.
Total Revenue
Total revenue in the first quarter was $1.72 billion, below the Zacks Consensus Estimate of $1.82 billion. The top line also dropped 2.2% from the year-ago figure of $1.76 billion. The downside was primarily due to lower contribution from its Ingalls and Newport News divisions.
Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise
Newport NewsShipbuilding: Segment revenues were $971 million, down 2.2% year over year due to lower sales in submarines. Operating income declined 11.1% to $72 million, owing to lower volume and risk retirement on the VCS program, partially offset by higher volume on the advance planning contract for the refueling and overhaul (RCOH) of USS George Washington.
Ingalls Shipbuilding: Segment revenues were $550 million, down 6.1% year over year on lower revenues in assault ships and surface combatants. Operating income at the segment dropped 19.5% to $66 million, thanks to lower risk retirement on USS John P. Murtha and Portland (LPD 27), partially offset by higher risk retirement on the NSC program.
Technical Solutions: Segment revenues were $225 million, up 8.2% year over year primarily due to the acquisition of Camber. Operating loss at the segment was $18 million against the year-ago period’s operating income of $3 million. The deterioration was due to establishment of a reserve against accounts receivable on a nuclear and environmental commercial contract in first-quarter 2017.
Backlog
The company received new orders worth $600 million during the reported quarter, as a result of which its total backlog reached $20 billion as of Mar 31, 2017.
Financial Update
Cash and cash equivalents as of Mar 31, 2017, were $608 million, down from $720 million as of Dec 31, 2016.
Long-term debt, as of Mar 31, 2017, was $1,273 million, below the 2016-end level of $1,343 million.
Cash from operating activities in first-quarter 2017 was $98 million, compared with $54 million in first-quarter 2016.
General Dynamics Corporation (GD - Free Report) reported first-quarter 2017 earnings from continuing operations of $2.48 per share, beating the Zacks Consensus Estimate of $2.32 by 6.9%. Its first-quarter total revenue of $7,441 million missed the Zacks Consensus Estimate of $7,595 million by 2%.
Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2017 earnings of $3.63 per share, beating the Zacks Consensus Estimate of $2.90 by 25.2%. Its total revenue of $6.27 billion beat the Zacks Consensus Estimate of $6.12 billion by 2.5%.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate by 8.7%. However, total revenue of $11.06 billion missed the Zacks Consensus Estimate by 1.8%.
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Huntington Ingalls (HII) Misses Q1 Earnings, Sales Drop Y/Y
Huntington Ingalls Industries, Inc. (HII - Free Report) first-quarter 2017 adjusted earnings of $1.87 per share missed the Zacks Consensus Estimate of $2.72 by 31.3%.
Adjusted earnings also declined 21.4% from $2.38 per share in the year-ago quarter owing to a decline in the top line and operating income. Barring the adjustment, the company’s reported earnings came in at $2.56 per share, reflecting a year-over-year deceleration of 10.8%.
Total Revenue
Total revenue in the first quarter was $1.72 billion, below the Zacks Consensus Estimate of $1.82 billion. The top line also dropped 2.2% from the year-ago figure of $1.76 billion. The downside was primarily due to lower contribution from its Ingalls and Newport News divisions.
Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise
Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise | Huntington Ingalls Industries, Inc. Quote
Segment Details
Newport NewsShipbuilding: Segment revenues were $971 million, down 2.2% year over year due to lower sales in submarines. Operating income declined 11.1% to $72 million, owing to lower volume and risk retirement on the VCS program, partially offset by higher volume on the advance planning contract for the refueling and overhaul (RCOH) of USS George Washington.
Ingalls Shipbuilding: Segment revenues were $550 million, down 6.1% year over year on lower revenues in assault ships and surface combatants. Operating income at the segment dropped 19.5% to $66 million, thanks to lower risk retirement on USS John P. Murtha and Portland (LPD 27), partially offset by higher risk retirement on the NSC program.
Technical Solutions: Segment revenues were $225 million, up 8.2% year over year primarily due to the acquisition of Camber. Operating loss at the segment was $18 million against the year-ago period’s operating income of $3 million. The deterioration was due to establishment of a reserve against accounts receivable on a nuclear and environmental commercial contract in first-quarter 2017.
Backlog
The company received new orders worth $600 million during the reported quarter, as a result of which its total backlog reached $20 billion as of Mar 31, 2017.
Financial Update
Cash and cash equivalents as of Mar 31, 2017, were $608 million, down from $720 million as of Dec 31, 2016.
Long-term debt, as of Mar 31, 2017, was $1,273 million, below the 2016-end level of $1,343 million.
Cash from operating activities in first-quarter 2017 was $98 million, compared with $54 million in first-quarter 2016.
Zacks Rank
Huntington Ingalls currently has a Zacks Rank #2 (Buy).You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Earnings Review
General Dynamics Corporation (GD - Free Report) reported first-quarter 2017 earnings from continuing operations of $2.48 per share, beating the Zacks Consensus Estimate of $2.32 by 6.9%. Its first-quarter total revenue of $7,441 million missed the Zacks Consensus Estimate of $7,595 million by 2%.
Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2017 earnings of $3.63 per share, beating the Zacks Consensus Estimate of $2.90 by 25.2%. Its total revenue of $6.27 billion beat the Zacks Consensus Estimate of $6.12 billion by 2.5%.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate by 8.7%. However, total revenue of $11.06 billion missed the Zacks Consensus Estimate by 1.8%.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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