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HII raises its 2026 shipbuilding revenue outlook to $10.5-$10.7B and reaffirms $500-$600M in free cash flow.
Huntington Ingalls Industries, Inc. (HII - Free Report) reported third-quarter 2026 earnings of $5.48 per share, up 48.9% year over year and 24.3% above the Zacks Consensus Estimate of $4.41.
HII’s Revenues
Revenues rose 10.8% to $3.54 billion and beat the consensus mark of $3.39 billion by 4.5%. Higher submarine and aircraft carrier volumes at Newport News Shipbuilding, along with increased amphibious assault ship volumes at Ingalls Shipbuilding, drove growth.
New contract awards totaled $32.4 billion during the quarter, lifting year-to-date awards to $43.1 billion.
Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise
Huntington Ingalls reported segmental operating income of $262 million compared with $179 million in the third quarter of 2025. The segmental operating margin expanded 180 basis points from the prior-year figure to 7.4%.
HII Segmental Performance
Newport News Shipbuilding remained the largest revenue contributor. Revenues increased to $1.91 billion from $1.62 billion, driven by higher submarine and aircraft carrier volumes. Segment operating income rose to $132 million from $80 million, while margin improved to 6.9% from 4.9% on contract adjustments and incentives in the Virginia-class submarine program, along with stronger submarine and aircraft carrier volumes.
Ingalls Shipbuilding revenues advanced to $876 million from $828 million, primarily due to higher amphibious assault ship volumes. Segment operating income declined to $59 million from $65 million, while margin fell to 6.7% from 7.9%, primarily due to lower performance in surface combatants.
Mission Technologies revenues increased slightly to $792 million from $787 million. Higher Unmanned Systems volumes more than offset lower Global Security volumes. Segment operating income improved to $71 million from $34 million, while margin expanded to 9.0% from 4.3%, primarily due to a successful milestone achievement, higher Unmanned Systems volumes and increased equity income from nuclear and environmental joint ventures.
Financial Update
Cash flow improved in the third quarter. Net cash provided by operating activities was $520 million compared with $118 million in the year-ago quarter. Free cash flow was $429 million against $16 million a year earlier. Net capital expenditures, after grant proceeds, totaled $91 million in the quarter.
HII ended September 2026 with $387 million in cash and cash equivalents compared with $774 million as of December 2025. The company paid $163 million in dividends during the first nine months of 2026.
2026 Guidance
Management raised its full-year shipbuilding revenue outlook while reaffirming its shipbuilding operating margin and free cash flow expectations. For 2026, HII now projects shipbuilding revenues of $10.5-$10.7 billion, up from the previous range of $10.2-$10.4 billion, with a shipbuilding operating margin of 6.0-6.5%.
Mission Technologies revenues are still expected at $3.0-$3.2 billion, with a segment operating margin of approximately 6%, up from the previous expectation of around 5%. The company now expects Mission Technologies EBITDA margin of approximately 9% compared with its earlier range of 8.4-8.6%.
HII reiterated free cash flow guidance of $500-$600 million.
Capital expenditures are now projected at approximately $500 million.
The company also set a cumulative 2026-2027 free cash flow target of $1.2-$1.3 billion.
Zacks Rank
Huntington Ingalls currently carries a Zacks Rank #3 (Hold).
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2026 adjusted earnings of $7.89 per share, which beat the Zacks Consensus Estimate of $7.22 by 9.3%. The bottom line also increased 2.9% from the year-ago quarter’s level of $7.67.
NOC’s total sales of $11.12 billion in the third quarter beat the Zacks Consensus Estimate of $11.06 billion by 0.6%. The top line also improved 6.7% from $10.42 billion reported in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2026 adjusted earnings of 50 cents per share, which improved 35.1% from the year-ago quarter’s figure of 37 cents. The bottom line also surpassed the Zacks Consensus Estimate of 48 cents by 4.2%.
The company’s net sales totaled $496.4 million, which missed the Zacks Consensus Estimate of $500 million by 0.8%. The top line, however, witnessed an improvement of 8.8% from the year-ago quarter’s figure of $456.2 million.
RTX Corporation’s (RTX - Free Report) third-quarter 2026 adjusted earnings per share of $2.26 beat the Zacks Consensus Estimate of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
Revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.
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HII Q3 Earnings Surpass Estimates, Revenues Increase Y/Y
Key Takeaways
Huntington Ingalls Industries, Inc. (HII - Free Report) reported third-quarter 2026 earnings of $5.48 per share, up 48.9% year over year and 24.3% above the Zacks Consensus Estimate of $4.41.
HII’s Revenues
Revenues rose 10.8% to $3.54 billion and beat the consensus mark of $3.39 billion by 4.5%. Higher submarine and aircraft carrier volumes at Newport News Shipbuilding, along with increased amphibious assault ship volumes at Ingalls Shipbuilding, drove growth.
New contract awards totaled $32.4 billion during the quarter, lifting year-to-date awards to $43.1 billion.
Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise
Huntington Ingalls Industries, Inc. price-consensus-eps-surprise-chart | Huntington Ingalls Industries, Inc. Quote
Operational Performance
Huntington Ingalls reported segmental operating income of $262 million compared with $179 million in the third quarter of 2025. The segmental operating margin expanded 180 basis points from the prior-year figure to 7.4%.
HII Segmental Performance
Newport News Shipbuilding remained the largest revenue contributor. Revenues increased to $1.91 billion from $1.62 billion, driven by higher submarine and aircraft carrier volumes. Segment operating income rose to $132 million from $80 million, while margin improved to 6.9% from 4.9% on contract adjustments and incentives in the Virginia-class submarine program, along with stronger submarine and aircraft carrier volumes.
Ingalls Shipbuilding revenues advanced to $876 million from $828 million, primarily due to higher amphibious assault ship volumes. Segment operating income declined to $59 million from $65 million, while margin fell to 6.7% from 7.9%, primarily due to lower performance in surface combatants.
Mission Technologies revenues increased slightly to $792 million from $787 million. Higher Unmanned Systems volumes more than offset lower Global Security volumes. Segment operating income improved to $71 million from $34 million, while margin expanded to 9.0% from 4.3%, primarily due to a successful milestone achievement, higher Unmanned Systems volumes and increased equity income from nuclear and environmental joint ventures.
Financial Update
Cash flow improved in the third quarter. Net cash provided by operating activities was $520 million compared with $118 million in the year-ago quarter. Free cash flow was $429 million against $16 million a year earlier. Net capital expenditures, after grant proceeds, totaled $91 million in the quarter.
HII ended September 2026 with $387 million in cash and cash equivalents compared with $774 million as of December 2025. The company paid $163 million in dividends during the first nine months of 2026.
2026 Guidance
Management raised its full-year shipbuilding revenue outlook while reaffirming its shipbuilding operating margin and free cash flow expectations. For 2026, HII now projects shipbuilding revenues of $10.5-$10.7 billion, up from the previous range of $10.2-$10.4 billion, with a shipbuilding operating margin of 6.0-6.5%.
Mission Technologies revenues are still expected at $3.0-$3.2 billion, with a segment operating margin of approximately 6%, up from the previous expectation of around 5%. The company now expects Mission Technologies EBITDA margin of approximately 9% compared with its earlier range of 8.4-8.6%.
HII reiterated free cash flow guidance of $500-$600 million.
Capital expenditures are now projected at approximately $500 million.
The company also set a cumulative 2026-2027 free cash flow target of $1.2-$1.3 billion.
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.
Recent Defense Releases
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2026 adjusted earnings of $7.89 per share, which beat the Zacks Consensus Estimate of $7.22 by 9.3%. The bottom line also increased 2.9% from the year-ago quarter’s level of $7.67.
NOC’s total sales of $11.12 billion in the third quarter beat the Zacks Consensus Estimate of $11.06 billion by 0.6%. The top line also improved 6.7% from $10.42 billion reported in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2026 adjusted earnings of 50 cents per share, which improved 35.1% from the year-ago quarter’s figure of 37 cents. The bottom line also surpassed the Zacks Consensus Estimate of 48 cents by 4.2%.
The company’s net sales totaled $496.4 million, which missed the Zacks Consensus Estimate of $500 million by 0.8%. The top line, however, witnessed an improvement of 8.8% from the year-ago quarter’s figure of $456.2 million.
RTX Corporation’s (RTX - Free Report) third-quarter 2026 adjusted earnings per share of $2.26 beat the Zacks Consensus Estimate of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
Revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.