We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Huntington Ingalls Wins $936M Deal to Support DDG 51 Ships
Read MoreHide Full Article
Huntington Ingalls Industries, Inc. (HII - Free Report) recently secured a modification contract to exercise the fiscal 2020 option for the construction of a USS Arleigh Burke DDG-51 class ship. Work related to the deal is scheduled to be over by June 2027.
Details of the Deal
Valued at $936 million, the contract was awarded by the Naval Sea Systems Command, Washington, D.C. The deal also includes options for engineering change proposals, design budgeting requirements and post-delivery availabilities on the DDG 51 ship.
The majority of the work will be executed in Pascagoula, MS.
Importance of DDG-51 Ships
The DDG 51 Arleigh Burke-class is a multi-mission warship. It features an advanced anti-submarine warfare system, the AEGIS combat system, the Vertical Launching System, Lockheed's (LMT - Free Report) two embarked SH-60 helicopters along with advanced anti-aircraft missiles and land-attack missiles. Impressively, the warship offers protection against a wide range of threats, including ballistic missiles.
Huntington Ingalls’ business segment, Ingalls, has in-depth experience in manufacturing amphibious assault and expeditionary ships for the U.S. Navy. Being the U.S. Navy's primary surface combatant, the Aegis-equipped Arleigh Burke class (DDG 51) destroyers enjoy solid demand, indicating the possibility of increased revenue recognition for the company in the coming days.
In first-quarter 2020, revenues at the Ingalls segment increaseda solid7.7% on a year-over-year basis, with Arleigh Burke-class DDG program being one of the primary growth drivers. We expect the latest contract win to help this business unit witness similar solid positive top-line growth in the upcoming quarters.
What’s Next?
Looking ahead, per Technavio, the global naval shipbuilding market is expected to witness a CAGR of 3% over the 2020-2024 period to reach $14.36 billion. This indicates increased demand for various assault ships, including DDG-51. Huntington Ingalls — being a major shipbuilding giant — is poised to benefit.
Another prominent military shipbuilder in the nation, General Dynamics (GD - Free Report) should also enjoy the benefits of the aforementioned market expansion.
Price Movement
In a year’s time, shares of Huntington Ingalls have lost 20.9% compared with the industry’s 30.4% decline.
Zacks Rank & Stock to Consider
Huntington Ingalls currently carries a Zacks Rank #3 (Hold).
Embraer delivered a positive earnings surprise of 14.93% in the last reported quarter. The company has a long-term earnings growth rate of 17%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Huntington Ingalls Wins $936M Deal to Support DDG 51 Ships
Huntington Ingalls Industries, Inc. (HII - Free Report) recently secured a modification contract to exercise the fiscal 2020 option for the construction of a USS Arleigh Burke DDG-51 class ship. Work related to the deal is scheduled to be over by June 2027.
Details of the Deal
Valued at $936 million, the contract was awarded by the Naval Sea Systems Command, Washington, D.C. The deal also includes options for engineering change proposals, design budgeting requirements and post-delivery availabilities on the DDG 51 ship.
The majority of the work will be executed in Pascagoula, MS.
Importance of DDG-51 Ships
The DDG 51 Arleigh Burke-class is a multi-mission warship. It features an advanced anti-submarine warfare system, the AEGIS combat system, the Vertical Launching System, Lockheed's (LMT - Free Report) two embarked SH-60 helicopters along with advanced anti-aircraft missiles and land-attack missiles. Impressively, the warship offers protection against a wide range of threats, including ballistic missiles.
Huntington Ingalls’ business segment, Ingalls, has in-depth experience in manufacturing amphibious assault and expeditionary ships for the U.S. Navy. Being the U.S. Navy's primary surface combatant, the Aegis-equipped Arleigh Burke class (DDG 51) destroyers enjoy solid demand, indicating the possibility of increased revenue recognition for the company in the coming days.
In first-quarter 2020, revenues at the Ingalls segment increaseda solid7.7% on a year-over-year basis, with Arleigh Burke-class DDG program being one of the primary growth drivers. We expect the latest contract win to help this business unit witness similar solid positive top-line growth in the upcoming quarters.
What’s Next?
Looking ahead, per Technavio, the global naval shipbuilding market is expected to witness a CAGR of 3% over the 2020-2024 period to reach $14.36 billion. This indicates increased demand for various assault ships, including DDG-51. Huntington Ingalls — being a major shipbuilding giant — is poised to benefit.
Another prominent military shipbuilder in the nation, General Dynamics (GD - Free Report) should also enjoy the benefits of the aforementioned market expansion.
Price Movement
In a year’s time, shares of Huntington Ingalls have lost 20.9% compared with the industry’s 30.4% decline.
Zacks Rank & Stock to Consider
Huntington Ingalls currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the same industry is Embraer S.A. (ERJ - Free Report) , which holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Embraer delivered a positive earnings surprise of 14.93% in the last reported quarter. The company has a long-term earnings growth rate of 17%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>