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Huntington Ingalls (HII) Q1 Earnings Beat, Revenues Rise Y/Y

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Huntington Ingalls Industries, Inc.’s (HII - Free Report) first-quarter 2022 earnings of $3.50 per share declined 4.9% from $3.68 reported in the prior-year quarter. The bottom line however beat the Zacks Consensus Estimate of $3.31 by 5.7%.

Total Revenues

Total revenues came in at $2,576 million, surpassing the Zacks Consensus Estimate of $2,534 million by 1.6%. The top line also improved 13.1% from $2,278 million in the year-ago quarter.

The year-over-year upside can be attributed to the acquisition of Alion Science and Technology (Alion).

Operational Performance

Huntington Ingalls reported an operating income of $138 million compared with $147 million in the first quarter of 2021. The company’s operating margin was 5.4%, which contracted 110 basis points from the prior-year quarter’s figure.

Huntington Ingalls received orders worth $2 billion in the first quarter. As a result, the company’s total backlog reached $47.9 billion as of Mar 31, 2022.

Segmental Performance

Newport News Shipbuilding: Revenues totaled $1,390 million in this segment, down 1.2% year over year due to lower revenues from aircraft carriers and naval nuclear support services.

The segment reported operating earnings of $81 million in the quarter, which declined 12.9% year over year.

Ingalls Shipbuilding: Revenues in this segment totaled $631 million, down 2.8% year over year due to lower revenues from the Arleigh Burke-class guided missile destroyer program.

The segment’s operating income of $86 million decreased 5.5% year over year.

Mission Technologies: Revenues in this segment totaled $590 million, up a solid 127.8% year over year, primarily driven by the acquisition of Alion Science and Technology.

Operating income improved 28.6% year over year to $9 million.

Financial Update

The company’s cash and cash equivalents at the end of first-quarter 2022 were $330 million, down from $627 million as of Dec 31, 2021.

Long-term debt at the end of first-quarter 2022 was $3,200 million compared with the 2021-end level of $3,298 million.

Cash outflow from operating activities during the first quarter was $83 million against cash flow of $43 million during first-quarter 2021.

Guidance

Huntington Ingalls has reaffirmed its 2022 guidance. The company continues to expect 2022 shipbuilding revenues in the range of $8.2-$8.5 billion and Mission Technologies revenues of approximately $2.6 billion.

The company also continues to project free cash flow in the range of $300-$350 million.

Zacks Rank

Huntington Ingalls currently carries a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Raytheon Technologies’ (RTX - Free Report) first-quarter 2022 adjusted earnings per share (EPS) of $1.15 beat the Zacks Consensus Estimate of $1.01 by 13.9%. Moreover, the bottom-line figure improved 27.8% from the year-ago quarter’s adjusted earnings of 90 cents.

Raytheon’s first-quarter sales of $15,716 million missed the Zacks Consensus Estimate of $15,799 million by 0.5%. The sales figure, however, rose 3% from $15,251 million recorded in the year-ago quarter.

Lockheed Martin (LMT - Free Report) reported first-quarter 2022 earnings of $6.44 per share, which surpassed the Zacks Consensus Estimate of $6.22 by 3.5%. The bottom line, however, declined 1.8% year over year.

Lockheed Martin’s net sales amounted to $14.96 billion, which missed the Zacks Consensus Estimate of $15.53 billion by 3.7%. The top line also declined 8% from $16.26 billion reported in the year-ago quarter

Teledyne Technologies Inc. (TDY - Free Report) reported first-quarter 2022 adjusted earnings of $4.27 per share, which surpassed the Zacks Consensus Estimate of $4.09 by 4.4%. The bottom line also improved 33.9% from the year-ago quarter’s $3.19 per share.

Teledyne’s total sales in the first quarter amounted to $1,321 million, which exceeded the Zacks Consensus Estimate of $1,315 million by 0.5%. The top line also improved 64% from $805.7 million reported a year ago.