Huntington Ingalls Industries, Inc.’s ( HII Quick Quote HII - Free Report) business unit, Ingalls Shipbuilding, recently clinched a contract to procure long-lead-time material for one amphibious assault ship, LHA 9. The award has been offered by the Naval Sea Systems Command, Washington, D.C. Details of the Deal
Valued at $70.9 million, the contract involves procurement of long-lead-time material for the LHA 9 ship. The majority of work related to this deal will be carried out in Philadelphia, PA.
Huntington Ingalls’ Position in Shipbuilding
Huntington Ingalls business unit enjoys a dominant position in the global naval shipbuilding market backed by its expertise in designing and manufacturing of non-nuclear ships, which primarily constitute amphibious assault ships, expeditionary warfare ships, surface combatants and dock ships, for the U.S. Navy and U.S. Coast Guard.
Such excellence enables the company to continue winning contracts for ships building and related modification. Prior to this contract, Ingalls Shipbuilding received a modification contract in November 2021 from the U.S. Navy valued at $113.6 million. The contract involved long-lead-time material and advance procurement activities for amphibious assault ship LHA 9.
With such supremacy in the naval shipbuilding arena, Huntington Ingalls may continue to see a strong inflow of contracts from the Pentagon in the days ahead. This, in turn, is likely to bolster its future revenues from the shipbuilding segment.
In June 2021, the Biden administration issued a document, which further entailed great prospects for amphibious fleet of ships. The document featured addition of amphibious fleet of 48 to 63 amphibious ships to the U.S. Navy. This should further benefit shipbuilders like Huntington Ingalls.
Global Growth Prospects
Per a Mordor Intelligence report, the global naval shipbuilding market is expected to witness a CAGR of 4% to $167 billion by 2026. This, in turn, is likely to drive overall growth of shipbuilding manufacturers like Huntington Ingalls,
General Dynamics ( GD Quick Quote GD - Free Report) , Mitsubishi Heavy Industries ( MHVYF Quick Quote MHVYF - Free Report) and BAE Systems ( BAESY Quick Quote BAESY - Free Report) .
General Dynamic’sNASSCO unit has been designing, building, and repairing ships since 1960. In November 2021, General Dynamics NASSCO launched the future USNS Harvey Milk (T-AO 206) — the second ship for the U.S. Navy’s John Lewis-class fleet oiler program.
The Zacks Consensus Estimate for General Dynamic’s 2021 earnings has been revised upward by 0.3% in the last 60 days to $11.53 per share. Shares of General Dynamic have appreciated 32.7% in the last one year.
Mitsubishi Heavy Industries specializes in building naval shipsand maritime systems. The company provides after-sales service for destroyers and submarines, the symbols of maritime operation.
The Zacks Consensus Estimate for Mitsubishi’s earnings has increased 2.6% to $2.74 in the last 90 days. The stock’s earnings estimate for the current year implies a growth rate of 140.4% from the prior-year figure.
Bae Systems designs and manufactures naval ships and submarines, as well as their state-of-the-art combat systems and equipment. In September 2021, BAE Systems secured a five-year Systems Engineering and Integration Support Services contract worth up to $478 million, to continue supporting the U.S. Navy Strategic Systems Programs (SSP) office.
The long-term earnings growth rate estimate for the company is pegged at 3.6%. Shares of Bae Systems have returned 3.8% in the last one year.
Image Source: Zacks Investment Research Price Movement
In a year’s time, shares of Huntington Ingalls have gained 6.7% against the
industry’s decline of 33.5%. Zacks Rank
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.