It has been about a month since the last earnings report for Huntington Ingalls (HII Quick QuoteHII - Free Report) . Shares have lost about 10% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Huntington Ingalls due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

HII Q1 Earnings Surpass Estimates, Revenues Increase Y/Y

Huntington Ingalls Industries, Inc.’s posted first-quarter 2026 earnings of $3.79 per share, matching the year-ago level and topping the Zacks Consensus Estimate of $3.70 by 2.4%.

Total Revenues

Quarterly revenues came in at $3.10 billion, up 13.4% year over year and ahead of the consensus mark of $3.02 billion by 2.7%.

The quarter reflected higher volumes across the business, led by aircraft carrier, submarine and naval nuclear support services work.

HII also booked $4.0 billion of new contract awards in the period, lifting total backlog to $54.0 billion as of March 31, 2026.

Operational Performance

Huntington Ingalls reported segmental operating income of $172 million compared with $171 million in the first quarter of 2025. The segmental operating margin contracted 70 basis points from the prior-year figure to 5%.

HII Segmental Performance

Newport News Shipbuilding remained the largest contributor in the quarter. Segment revenues rose to $1.67 billion from $1.40 billion a year earlier, driven by higher volumes in aircraft carriers, submarines and naval nuclear support services. Segment operating income edged up to $88 million from $85 million, while segment operating margin declined to 5.3% from 6.1%, reflecting contract adjustments and lower performance in aircraft carrier construction.

Ingalls Shipbuilding delivered solid growth as well. Segment revenues increased to $725 million from $637 million, primarily on higher surface combatant volumes. Segment operating income improved to $49 million from $46 million, but segment operating margin narrowed to 6.8% from 7.2% as lower performance in amphibious assault ships partially offset the benefits of stronger volume.

Mission Technologies posted steadier gains. Segment revenues were $748 million compared with $735 million a year ago, supported by higher volumes in All-Domain Operations, Unmanned Systems and Global Security, partially offset by lower volumes in Warfare Systems. Segment operating income declined to $35 million from $40 million and segment operating margin eased to 4.7% from 5.4%, mainly due to lower equity income from nuclear and environmental joint ventures.

Financial Update

Cash flow remained seasonally pressured in the first quarter. Net cash used in operating activities was $390 million and free cash flow was negative $461 million, essentially unchanged from the prior-year period. Net capital expenditures totaled $71 million in the quarter, including $74 million of capex additions and $3 million of grant proceeds.

On capital deployment, HII paid $54 million in dividends and did not repurchase shares during the quarter. The company ended March 2026, with $216 million in cash and cash equivalents.

2026 Guidance

Management reaffirmed its full-year expectations and maintained its medium-term growth framework. For 2026, HII continues to project shipbuilding revenues of $9.70-$9.90 billion with a shipbuilding operating margin of 5.5-6.5%.

Mission Technologies revenues are still expected at $3.0-$3.2 billion, with segment operating margin around 5% and EBITDA margin of 8.4-8.6%.

The company also reiterated free cash flow guidance of $500-$600 million and capital expenditures of 4-5% of sales.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -9.19% due to these changes.

VGM Scores

Currently, Huntington Ingalls has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Huntington Ingalls has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Huntington Ingalls is part of the Zacks Aerospace - Defense industry. Over the past month, GE Aerospace (GE Quick QuoteGE - Free Report) , a stock from the same industry, has gained 2.9%. The company reported its results for the quarter ended March 2026 more than a month ago.

GE reported revenues of $11.61 billion in the last reported quarter, representing a year-over-year change of +29%. EPS of $1.86 for the same period compares with $1.49 a year ago.

For the current quarter, GE is expected to post earnings of $1.87 per share, indicating a change of +12.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0% over the last 30 days.

GE has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.