Huntington Ingalls Industries, Inc.’s (HII - Free Report) Newport News business division recently secured a contract for conducting repair work on the U.S. Navy’s nuclear-powered submarines and special mission submersibles. Through this contract, Huntington will also offer other support facilities for these submarines as well as moored training ships.
Details of the Deal
Valued at $400 million, this contract was awarded by the Naval Sea System Command, Washington, DC and contains a five-year ordering period. Work will be carried out at the nuclear qualified shipyard of Norfolk, VA.
Under the terms of the agreement, repairing services of the submarines will include overhaul, maintenance, repair, modernization upgrades, technical engineering support, supplies and services, as well as nuclear related touch labor support efforts.
Being the largest military shipbuilding company in the U.S., Huntington – one among the only two nuclear-powered submarine makers for the U.S. Navy – is also the primary industrial developer in Virginia. Through its Newport News segment, the company operates as the nation's sole designer, builder and refueler of nuclear-powered aircraft carriers.Over 70% of the active Navy fleet consists of Huntington Ingalls ships.
Within this segment, the company has been making considerable progress toward completion of the CVN-72 Lincoln refueling overhaul and CVN-65 Enterprise inactivation, and is actively working with the U.S. Navy to determine the appropriate path for redelivery for both the ships. We believe the contract and the redelivery efforts on management’s part to facilitate Huntington in witnessing a positive rebound in the operating results of its Newport News business segment, as opposed to the declining top line growth observed in second quarter.
Zacks Rank & Other Stocks to Consider
Huntington currently carries a Zacks Rank # 3 (Hold). A few better-ranked stocks in the aerospace and defense sector include Engility Holdings, Inc. (EGL - Free Report) , AAR Corp. (AIR - Free Report) and General Dynamics Corp (GD - Free Report) .
Engility sports a Zacks Rank #1 (Strong Buy) and has witnessed a 4.37% rise in its last 1 month’s stock price. On average, the company delivered a positive earnings surprise of 12.09% in the trailing four quarters.
AAR Corp also sports a Zacks Rank #1 and has witnessed a 19.5% surge in its last 1 month’s stock price. This company’s current year consensus estimate improved 5% in last 30 days. You can seethe complete list of today’s Zacks #1 Rank stocks here.
General Dynamics sports a Zacks Rank #2 (Buy) and has witnessed a 1.52% rise in its last 1 month’s stock price. This company’s current year consensus estimate improved 9.4% in last 60 days.
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