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Will Segmental Sales Aid Huntington's (HII) Q2 Earnings?

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Huntington Ingalls Industries, Inc. (HII - Free Report) is slated to report its second-quarter 2023 results on Aug 3 before market open.

Huntington Ingalls delivered an earnings surprise of 7.67% in the last reported quarter. Mission Technologies and Newport business segments’ strong revenue performances are expected to have added impetus to HII’s top line.  

Ingalls’ Revenue Growth Likely to be Weak

Lower revenues from amphibious assault ships and the Legend-class National Security Cutter program are likely to have weighed down on this segment’s revenue performance in the second quarter. The downside may have been partially offset by higher revenues from surface combatants.

The Zacks Consensus Estimate for Ingalls’ second-quarter revenues, pegged at $627.8 million, suggests a decline of 4.6% from the year-ago quarter’s reported figure.

Newport to Remain Strong

Higher revenues from aircraft carriers and submarines may have contributed to the Newport segment’s revenues in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for Newport’s second-quarter revenues, pegged at $1,478.6 million, indicates growth of 3.2% from the year-ago quarter’s reported figure.

Mission Technologies to Continue Growth Momentum

Higher volumes of mission-based solutions and fleet sustainment are likely to have aided Mission Technologies’ revenue performance in the second quarter of 2023.

The Zacks Consensus Estimate for Mission Technologies’ second-quarter revenues, pegged at $610.3 million, suggests an increase of 1.7% from the year-ago quarter’s reported figure.

Second-Quarter Estimates

Expected growth in Mission Technologies and Newport business segments’ revenues may have boosted the company’s overall top line in the second quarter.

The Zacks Consensus Estimate for second-quarter sales is pegged at $2.73 billion, indicating an increase of 2.4% from the prior-year reported figure.

A strong top line is likely to have contributed to HII’s second-quarter bottom line. However, macroeconomic challenges like higher inflation and supply-chain challenges and a tight labor market may have adversely impacted overall earnings in the second quarter of 2023.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.14 per share. This indicates a decline of 29.3% from the prior-year reported figure.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Huntington Ingalls this time. 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, which is the case here.

Huntington Ingalls has an Earnings ESP of +0.48% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are three other defense players you may want to consider as these also have the right combination of elements to post an earnings beat this season:

Embraer S.A. (ERJ - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank #3. The long-term earnings growth rate of ERJ is 17%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Embraer’s second-quarter earnings, pegged at 12 cents per share, indicates a decline of 42.9% from the prior-year reported figure. The Zacks Consensus Estimate for ERJ’s sales suggests a growth rate of 14.3% from the prior-year reported figure.

Curtiss-Wright Corporation (CW - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #2.  The Zacks Consensus Estimate for second-quarter sales is pegged at $648.8 million. This indicates an increase of 6.5% from the prior-year reported figure.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.97 per share, calling for an upside of 7.7% from the prior-year reported figure. The company delivered an earnings surprise of 8.51% in the last reported quarter.

TransDigm Group (TDG - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #2. It delivered a four-quarter average earnings surprise of 8.97%. The Zacks Consensus Estimate for second-quarter sales is pegged at $1.68 billion, indicating an improvement of 20% from the prior-year reported figure.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $6.33 per share. This suggests 30.5% growth from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.  

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