Huntington Ingalls Industries, Inc. (HII - Free Report) is set to report first-quarter 2021 results on May 6, before market open.
This military shipbuilder missed the Zacks Consensus Estimate in three of the trailing four quarters and beat only in the remaining one, the average negative surprise being 21.78%.
The company’s Newport News and Ingalls segments are likely to have boosted its first-quarter revenues.
Let’s discuss how things have shaped up prior to the announcement.
Newport News Segment — A Key Catalyst
Huntington Ingalls’ Newport News is the nation's sole designer, builder and refueler of nuclear-powered aircraft carriers. The segment generates more than 50% of the company’s total revenues.
Increased volumes in aircraft carrier construction and submarine construction tend to boost revenues for the company’s Newport News business division. We expect this trend to have prevailed in the first quarter as well since defense-related activities remained moderately resilient amid the coronavirus pandemic. However, unfavorable cost and schedule performance due to the pandemic might have affected this unit’s first-quarter results.
The Zacks Consensus Estimate for first-quarter revenues at Newport News is pegged at $1,378 million, implying a 2.8% improvement from the year-ago quarter’s reported figure.
Other Factors to Consider
The company has been making strategic investments within its Ingalls Shipbuilding division. This has enabled the unit to secure certain key contracts in the recent past. Such notable contract wins are expected to have boosted this unit’s top line in the soon-to-be-reported quarter.
In line with this, the Zacks Consensus Estimate for first-quarter revenues for the Ingalls Shipbuilding division is pegged at $647 million, indicating a 2.9% improvement from the figure reported in the year-ago quarter.
However, the company’s Technical Solutions segment is expected to have witnessed poor top-line results. Notably, the Zacks Consensus Estimate for first-quarter revenues in the Technical Solutions division is pegged at $231 million, indicating a 27.1% plunge from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for the company’s first-quarter 2021 revenues stands at $2.2 billion, suggesting a 1.9% decline from the year-earlier quarter’s reported figure.
In July 2020, the company announced changes to the organization and alignment within its Technical Solutions segment to better serve existing and future customers while achieving support function efficiencies. This reorganization might have adversely impacted the unit’s bottom-line performance.
Moreover, in the previous quarter’s earnings call, the company anticipated its Technical Solutions segment's operating and EBITDA margin to be below the lower end of the annual guidance range for the first quarter.
In line with such projections, the Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.52, implying a decline of 40.4% from the year-ago quarter’s reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Huntington Ingalls this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.
Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Huntington Ingalls carries a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntington Ingalls Industries, Inc. Price and EPS Surprise
A Stock to Consider
Here is a defense stock you may want to consider, as it has the right combination of elements to post an earnings beat in its upcoming release:
Triumph Group, Inc. (TGI - Free Report) has an Earnings ESP of +9.80% and a Zacks Rank #3.
Recent Defense Releases
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.
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Huntington Ingalls Industries, Inc. (HII - Free Report) is set to report first-quarter 2021 results on May 6, before market open.
This military shipbuilder missed the Zacks Consensus Estimate in three of the trailing four quarters and beat only in the remaining one, the average negative surprise being 21.78%.
The company’s Newport News and Ingalls segments are likely to have boosted its first-quarter revenues.
Let’s discuss how things have shaped up prior to the announcement.
Newport News Segment — A Key Catalyst
Huntington Ingalls’ Newport News is the nation's sole designer, builder and refueler of nuclear-powered aircraft carriers. The segment generates more than 50% of the company’s total revenues.
Increased volumes in aircraft carrier construction and submarine construction tend to boost revenues for the company’s Newport News business division. We expect this trend to have prevailed in the first quarter as well since defense-related activities remained moderately resilient amid the coronavirus pandemic. However, unfavorable cost and schedule performance due to the pandemic might have affected this unit’s first-quarter results.
The Zacks Consensus Estimate for first-quarter revenues at Newport News is pegged at $1,378 million, implying a 2.8% improvement from the year-ago quarter’s reported figure.
Other Factors to Consider
The company has been making strategic investments within its Ingalls Shipbuilding division. This has enabled the unit to secure certain key contracts in the recent past. Such notable contract wins are expected to have boosted this unit’s top line in the soon-to-be-reported quarter.
In line with this, the Zacks Consensus Estimate for first-quarter revenues for the Ingalls Shipbuilding division is pegged at $647 million, indicating a 2.9% improvement from the figure reported in the year-ago quarter.
However, the company’s Technical Solutions segment is expected to have witnessed poor top-line results. Notably, the Zacks Consensus Estimate for first-quarter revenues in the Technical Solutions division is pegged at $231 million, indicating a 27.1% plunge from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for the company’s first-quarter 2021 revenues stands at $2.2 billion, suggesting a 1.9% decline from the year-earlier quarter’s reported figure.
In July 2020, the company announced changes to the organization and alignment within its Technical Solutions segment to better serve existing and future customers while achieving support function efficiencies. This reorganization might have adversely impacted the unit’s bottom-line performance.
Moreover, in the previous quarter’s earnings call, the company anticipated its Technical Solutions segment's operating and EBITDA margin to be below the lower end of the annual guidance range for the first quarter.
In line with such projections, the Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.52, implying a decline of 40.4% from the year-ago quarter’s reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Huntington Ingalls this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.
Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Huntington Ingalls carries a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntington Ingalls Industries, Inc. Price and EPS Surprise
A Stock to Consider
Here is a defense stock you may want to consider, as it has the right combination of elements to post an earnings beat in its upcoming release:
Triumph Group, Inc. (TGI - Free Report) has an Earnings ESP of +9.80% and a Zacks Rank #3.
Recent Defense Releases
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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