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Huntington Ingalls (HII) Wins $303M Naval Ship Support Deal

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Huntington Ingalls Industries, Inc.’s (HII - Free Report) business unit, Ingalls Shipbuilding division, recently secured a contract to provide planning yard support for a handful of ships. The award has been offered by the Naval Sea Systems Command, Washington, D.C.

Details of the Deal

Valued at $302.6 million, the contract is scheduled to be completed by May 2028. Notably, the yard support will be offered for LPD 17 amphibious transport dock ships, LHD 1/LHA 6 amphibious assault ships, LSD 41/49 dock landing ships and LCC 19 amphibious command ship.

Moreover, options included in this contract id exercised will bring its cumulative value to $724.3 million. The entire task related to this agreement will be carried out in Pascagoula, MI.

Huntington Ingalls’ Strength in Shipbuilding

Being America’s largest military shipbuilding manufacturer, Huntington Ingalls enjoys a dominant position in the global naval shipbuilding market. Its Ingalls segment is an expert designer and manufacturer of non-nuclear ships, including amphibious assault ships, expeditionary warfare ships, surface combatants and dock ships, for the U.S. Navy and U.S. Coast Guard.

Moreover, Huntington Ingalls is currently the only builder of large deck amphibious assault ships and expeditionary warfare ships for the U.S. Navy, including LHAs and LPDs. Therefore, it is likely to secure a solid number of contracts from the Pentagon, involving manufacturing and related support for such attack ships. The latest contract win is an example of that.

Growth Prospects

Looking ahead, the global naval shipbuilding market is expected to grow by $14.36 billion during the 2020-2024 period at a CAGR of 3%, as estimated by a Technavio report. This, in turn, tends to boost revenue generation prospects for major shipbuilding manufacturer like Huntington Ingalls.

Other players in the same industry, including General Dynamics (GD - Free Report) , Mitsubishi Heavy Industries, Ltd. (MHVYF - Free Report) and BAE Systems (BAESY - Free Report) should also get potentially benefited from the projected growth of the naval shipbuilding market.

Price Performance & Zacks Rank

Shares of Huntington Ingalls have gained 9.2% in a year compared with the industry’s growth of 16.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

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

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