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Huntington Ingalls (HII) Wins Deal to Aid Aircraft Carriers
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Huntington Ingalls Industries Inc.’s (HII - Free Report) business unit, Newport News, clinched a modification contract to support Ford Class aircraft carriers. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Valued at $19.4 million, the contract is expected to be completed by August 2029. Per the terms of the deal, Huntington will procure spare main propulsion unit rotors for Ford Class aircraft carriers.
Majority of the work related to this contract will be executed in Summerville, SC.
Aircraft Carriers & Huntington Ingalls
Huntington Ingalls’ Newport News unit is an expert in engineering, design and construction of U.S. Navy CVNs. These are the largest ships in the U.S. Navy's fleet, with a displacement of more than 90,000 tons.
The abovementioned unit has designed and built the first next generation ship, Gerald R. Ford class (CVN 78) aircraft carriers, and more than 31 aircraft carriers for the U.S. Navy since 1933. This includes all 10 Nimitz class (CVN 68) aircraft carriers currently in service.
The U.S. defense budget request for fiscal 2024 reflects funding for USS Gerald R. Ford class (CVN 78) nuclear aircraft carriers and aircraft carrier refueling programs, and investment in the submarine industrial base. This should benefit Huntington Ingalls’ shipbuilding business significantly.
The aforementioned discussion reflects the solid position that HII enjoys in the nuclear aircraft carrier market, resulting in a strong inflow of contracts for the company. The latest contract win is a bright example of that.
Growth Prospects
Nations are strengthening their defense capabilities amid rising geopolitical tensions. In this context, the demand for military ships with next-generation technology-based warfare capabilities is gaining momentum. This is due to the system’s growing importance in military missions.
Per a report from Mordor Intelligence, the aircraft carrier ship market is projected to witness a CAGR of more than 2% during the 2023-2028 period. Such solid growth trends indicate ample growth opportunities for Huntington Ingalls, as it enjoys the lucrative position of a prominent aircraft carrier in the market.
A few other defense primes that can gain from the expanding aircraft carrier market are General Dynamics (GD - Free Report) , BAE Systems (BAESY - Free Report) and Lockheed Martin (LMT - Free Report) .
General Dynamics’ NASSCO-Norfolk, a consolidation of two great shipyards, is a Master Ship Repair contractor. It provides high-quality and cost-effective maintenance and modernization for the U.S. Navy. With facilities in Bremerton, WA, in the Pacific Northwest, NASSCO-Norfolk holds experience in more than 450 ships, a Master Ship Repair Agreement contract, and the maintenance and repair of aircraft carriers from the Navy's amphibious fleet.
GD boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates an improvement of 7.3% from the year-ago reported figure.
BAE Systems designs and manufactures naval ships as well as state-of-the-art combat systems and equipment supporting those warships. The company played a key role in the design and construction of the Queen Elizabeth Class Aircraft Carrier, the largest warship in the United Kingdom. It also provides management and delivery of planned overseas support to the aircraft carrier.
BAESY boasts a long-term earnings growth rate of 14.3%. The Zacks Consensus Estimate for BAE Systems’ 2023 sales indicates an improvement of 15.7% from that reported in 2022.
Lockheed’s Surface Electronic Warfare Improvement Program Block 2 systems are used to upgrade warships’ electronic warfare capabilities. This helps warfighters respond to evolving threats. The company also offers upgrade to the AN/SLQ-32 systems on U.S. aircraft carriers to determine if its potential foes are tracking the ships using electronic sensors.
LMT boasts a long-term earnings growth rate of 6.5%. It delivered an average four-quarter earnings surprise of 5.04%.
Price Performance
Shares of Huntington Ingalls have lost 6.5% in the past year compared with the industry’s 8.9% decline.
Image: Bigstock
Huntington Ingalls (HII) Wins Deal to Aid Aircraft Carriers
Huntington Ingalls Industries Inc.’s (HII - Free Report) business unit, Newport News, clinched a modification contract to support Ford Class aircraft carriers. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Valued at $19.4 million, the contract is expected to be completed by August 2029. Per the terms of the deal, Huntington will procure spare main propulsion unit rotors for Ford Class aircraft carriers.
Majority of the work related to this contract will be executed in Summerville, SC.
Aircraft Carriers & Huntington Ingalls
Huntington Ingalls’ Newport News unit is an expert in engineering, design and construction of U.S. Navy CVNs. These are the largest ships in the U.S. Navy's fleet, with a displacement of more than 90,000 tons.
The abovementioned unit has designed and built the first next generation ship, Gerald R. Ford class (CVN 78) aircraft carriers, and more than 31 aircraft carriers for the U.S. Navy since 1933. This includes all 10 Nimitz class (CVN 68) aircraft carriers currently in service.
The U.S. defense budget request for fiscal 2024 reflects funding for USS Gerald R. Ford class (CVN 78) nuclear aircraft carriers and aircraft carrier refueling programs, and investment in the submarine industrial base. This should benefit Huntington Ingalls’ shipbuilding business significantly.
The aforementioned discussion reflects the solid position that HII enjoys in the nuclear aircraft carrier market, resulting in a strong inflow of contracts for the company. The latest contract win is a bright example of that.
Growth Prospects
Nations are strengthening their defense capabilities amid rising geopolitical tensions. In this context, the demand for military ships with next-generation technology-based warfare capabilities is gaining momentum. This is due to the system’s growing importance in military missions.
Per a report from Mordor Intelligence, the aircraft carrier ship market is projected to witness a CAGR of more than 2% during the 2023-2028 period. Such solid growth trends indicate ample growth opportunities for Huntington Ingalls, as it enjoys the lucrative position of a prominent aircraft carrier in the market.
A few other defense primes that can gain from the expanding aircraft carrier market are General Dynamics (GD - Free Report) , BAE Systems (BAESY - Free Report) and Lockheed Martin (LMT - Free Report) .
General Dynamics’ NASSCO-Norfolk, a consolidation of two great shipyards, is a Master Ship Repair contractor. It provides high-quality and cost-effective maintenance and modernization for the U.S. Navy. With facilities in Bremerton, WA, in the Pacific Northwest, NASSCO-Norfolk holds experience in more than 450 ships, a Master Ship Repair Agreement contract, and the maintenance and repair of aircraft carriers from the Navy's amphibious fleet.
GD boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates an improvement of 7.3% from the year-ago reported figure.
BAE Systems designs and manufactures naval ships as well as state-of-the-art combat systems and equipment supporting those warships. The company played a key role in the design and construction of the Queen Elizabeth Class Aircraft Carrier, the largest warship in the United Kingdom. It also provides management and delivery of planned overseas support to the aircraft carrier.
BAESY boasts a long-term earnings growth rate of 14.3%. The Zacks Consensus Estimate for BAE Systems’ 2023 sales indicates an improvement of 15.7% from that reported in 2022.
Lockheed’s Surface Electronic Warfare Improvement Program Block 2 systems are used to upgrade warships’ electronic warfare capabilities. This helps warfighters respond to evolving threats. The company also offers upgrade to the AN/SLQ-32 systems on U.S. aircraft carriers to determine if its potential foes are tracking the ships using electronic sensors.
LMT boasts a long-term earnings growth rate of 6.5%. It delivered an average four-quarter earnings surprise of 5.04%.
Price Performance
Shares of Huntington Ingalls have lost 6.5% in the past year compared with the industry’s 8.9% decline.
Image Source: Zacks Investment Research
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.