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Huntington Ingalls (HII) Q3 Earnings Top, Revenues Up Y/Y

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Huntington Ingalls Industries, Inc.’s (HII - Free Report) third-quarter 2018 earnings of $5.29 per share surpassed the Zacks Consensus Estimate of $4.14 by 27.8%. The bottom line also improved 61.8% from $3.27 a year ago, courtesy of solid revenue growth and operating income.

Total Revenues

Total revenues came in at $2.08 billion, which outpaced the Zacks Consensus Estimate of $1.92 billion by 8.3%. The top line also rose 11.8% from $1.86 billion registered a year ago. The upside can be attributed to higher sales volume at all the three business divisions of the company.

Segment Details

Newport News Shipbuilding: Revenues totaled $1,179 million, up 12% year over year backed by higher revenues in naval nuclear support services and aircraft carriers. Operating income improved 24% to $119 million owing to result of favorable changes in workers’ compensation expense.

Ingalls Shipbuilding: Revenues at this segment came in at $694 million, up 17% year over year on account of higher revenues in amphibious assault ships and the Legend-class National Security Cutter (NSC) program. Operating income improved 10.8% to $82 million owing to higher volumes.

Technical Solutions: Revenues at this segment summed $245 million, up 1.7% year over year. The upside was driven by higher oil and gas services and mission driven innovative solutions revenues. Operating income totaled $16 million compared with $22 million in the year-ago quarter.

Backlog

Huntington Ingalls received new orders worth $2.8 billion in third quarter. As a result, the company’s total backlog reached $22 billion as of Sep 30, 2018.

Financial Update

Cash and cash equivalents as of Sep 30, 2018, were $68 million, significantly down from $701 million as of Dec 31, 2017.

Long-term debt, as of Sep 30, 2018, was $1,282 million compared with the 2017-end level of $1,279 million.

Cash from operating activities, at the end of third-quarter 2018, grossed $266 million compared with $380 million at the end of 2017’s third quarter.

Zacks Rank

Huntington Ingalls has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Spirit AeroSystems Holdings (SPR - Free Report) reported third-quarter 2018 adjusted earnings of $1.70 per share, which surpassed the Zacks Consensus Estimate of $1.63 by 4.3%. Total revenues of $1,814 million missed the consensus mark of $1,817 million by 0.2%.

Curtiss-Wright (CW - Free Report) reported third-quarter 2018 adjusted earnings of $1.70 per share, which outpaced the Zacks Consensus Estimate of $1.58 by 7.6%. The company’s revenues of $595.4 million increased 5% year over year.

TransDigm Group Incorporated (TDG - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of $4.44 per share, which exceeded the Zacks Consensus Estimate of $4.27 by 4%. Moreover, the bottom line improved 27.6% from $3.48 a year ago.

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