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HII Expands Partnership With Babcock to Build Virginia-Class Submarine
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Key Takeaways
HII deepens its partnership with Babcock to further enhance Virginia-class submarine construction throughput.
The deal enables Babcock to build complex assemblies in Scotland for Virginia-class Block VI submarines.
HII expects added capacity, reduced bottlenecks and stronger U.S.-U.K. submarine collaboration.
Huntington Ingalls Industries (HII - Free Report) recently stated that it has signed a contract with Babcock International Group that expands its partnership to further enhance Virginia-class submarine construction throughput at HII’s Newport News Shipbuilding (“NNS”) division.
The new contract also aims to strengthen the resilience of HII’s submarine supply chain. This marks the first time Babcock will support NNS-specific submarine work, with authorization to manufacture complex submarine assemblies at its Rosyth facility in Scotland for Virginia-class Block VI fast-attack submarines.
Benefits of HII’s Partnership
HII stands to gain several strategic benefits from its expanded partnership with Babcock. Outsourcing complex Virginia-class Block VI submarine assemblies to Babcock’s Rosyth facility will help increase production throughput, reduce workload strain at Newport News and bolster the resilience of HII’s submarine supply chain. Adding a highly experienced U.K. manufacturing partner enhances schedule stability and minimizes risks.
Leveraging Babcock’s reach and expertise in the U.K. will reinforce the company’s supplier base and strengthen submarine production in the United States. Overall, the partnership expands capacity, reduces supply-chain exposure and better positions HII for future U.S.-U.K. submarine collaboration, including potential AUKUS-related opportunities.
Growth Potential
Nations are accelerating investments in submarines as they work to enhance their naval warfare capabilities and maintain strategic advantages in increasingly contested maritime regions. Per a report by the Mordor Intelligence firm, the submarine market is expected to witness a compound annual growth rate of 4.17% during 2025-2030. This outlook suggests substantial growth prospects for Huntington Ingalls, which maintains a strong, profitable foothold in the military submarine market.
Some other defense players that can gain from the expanding submarine market are General Dynamics Corp. (GD - Free Report) , BAE Systems plc (BAESY - Free Report) and Northrop Grumman Corp. (NOC - Free Report) .
General Dynamics’ Marine Systems segment serves as the U.S. Navy’s leading designer and manufacturer of nuclear-powered submarines. The unit provides state-of-the-art weapon systems, combat control technologies, sonar capabilities, and cybersecurity solutions for the Navy’s Virginia-class, Ohio-class and Columbia-class submarines.
GD stock boasts a long-term (three to five years) earnings growth rate of 12.81%. The Zacks Consensus Estimate for 2025 sales is pegged at $51.97 billion, which indicates a rise of 8.9%.
BAE Systems has served as a key and reliable supplier to the U.S. Navy’s undersea fleet for more than three decades. The company is known for manufacturing highly complex, heavy submarine structures that are essential to modern submarine construction. It is also the primary manufacturer of the Astute-class nuclear submarines, a key component of the Royal Navy’s fleet.
BAESY boasts a long-term earnings growth rate of 14.57%. The Zacks Consensus Estimate for 2025 sales is pegged at $40.68 billion, which suggests an increase of 62.9%.
Northrop Grumman is a major provider of missile launch systems for naval submarines. The company supplies Launcher Subsystem hardware used in the common missile compartment program supporting both Columbia-class and Dreadnought-class submarines.
NOC boasts a long-term earnings growth rate of 4.16%. The Zacks Consensus Estimate for 2025 sales is pegged at $41.89 billion, which calls for a jump of 2.1%.
HII Stock Price Movement
In the past six months, HII shares have climbed 39.3% compared with the industry’s 6% growth.
Image: Bigstock
HII Expands Partnership With Babcock to Build Virginia-Class Submarine
Key Takeaways
Huntington Ingalls Industries (HII - Free Report) recently stated that it has signed a contract with Babcock International Group that expands its partnership to further enhance Virginia-class submarine construction throughput at HII’s Newport News Shipbuilding (“NNS”) division.
The new contract also aims to strengthen the resilience of HII’s submarine supply chain. This marks the first time Babcock will support NNS-specific submarine work, with authorization to manufacture complex submarine assemblies at its Rosyth facility in Scotland for Virginia-class Block VI fast-attack submarines.
Benefits of HII’s Partnership
HII stands to gain several strategic benefits from its expanded partnership with Babcock. Outsourcing complex Virginia-class Block VI submarine assemblies to Babcock’s Rosyth facility will help increase production throughput, reduce workload strain at Newport News and bolster the resilience of HII’s submarine supply chain. Adding a highly experienced U.K. manufacturing partner enhances schedule stability and minimizes risks.
Leveraging Babcock’s reach and expertise in the U.K. will reinforce the company’s supplier base and strengthen submarine production in the United States. Overall, the partnership expands capacity, reduces supply-chain exposure and better positions HII for future U.S.-U.K. submarine collaboration, including potential AUKUS-related opportunities.
Growth Potential
Nations are accelerating investments in submarines as they work to enhance their naval warfare capabilities and maintain strategic advantages in increasingly contested maritime regions. Per a report by the Mordor Intelligence firm, the submarine market is expected to witness a compound annual growth rate of 4.17% during 2025-2030. This outlook suggests substantial growth prospects for Huntington Ingalls, which maintains a strong, profitable foothold in the military submarine market.
Some other defense players that can gain from the expanding submarine market are General Dynamics Corp. (GD - Free Report) , BAE Systems plc (BAESY - Free Report) and Northrop Grumman Corp. (NOC - Free Report) .
General Dynamics’ Marine Systems segment serves as the U.S. Navy’s leading designer and manufacturer of nuclear-powered submarines. The unit provides state-of-the-art weapon systems, combat control technologies, sonar capabilities, and cybersecurity solutions for the Navy’s Virginia-class, Ohio-class and Columbia-class submarines.
GD stock boasts a long-term (three to five years) earnings growth rate of 12.81%. The Zacks Consensus Estimate for 2025 sales is pegged at $51.97 billion, which indicates a rise of 8.9%.
BAE Systems has served as a key and reliable supplier to the U.S. Navy’s undersea fleet for more than three decades. The company is known for manufacturing highly complex, heavy submarine structures that are essential to modern submarine construction. It is also the primary manufacturer of the Astute-class nuclear submarines, a key component of the Royal Navy’s fleet.
BAESY boasts a long-term earnings growth rate of 14.57%. The Zacks Consensus Estimate for 2025 sales is pegged at $40.68 billion, which suggests an increase of 62.9%.
Northrop Grumman is a major provider of missile launch systems for naval submarines. The company supplies Launcher Subsystem hardware used in the common missile compartment program supporting both Columbia-class and Dreadnought-class submarines.
NOC boasts a long-term earnings growth rate of 4.16%. The Zacks Consensus Estimate for 2025 sales is pegged at $41.89 billion, which calls for a jump of 2.1%.
HII Stock Price Movement
In the past six months, HII shares have climbed 39.3% compared with the industry’s 6% growth.
Image Source: Zacks Investment Research
HII’s Zacks Rank
Huntington Ingalls currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.