Will Poor Segmental Sales Performance Impact HII's Q2 Earnings?

Huntington Ingalls Industries, Inc. (HII) is scheduled to release second-quarter 2025 earnings on July 31, 2025, before market open.

The company has a four-quarter average negative earnings surprise of 4.20%.

Dismal sales growth expectations, along with weak operating margin performance, are projected to have impacted HII’s overall bottom line.

Anticipated Decline in Revenues in Ingalls Unit

Lower sales volume from amphibious assault ships is likely to have impacted the Ingalls segment’s top line in the second quarter.

The Zacks Consensus Estimate for the Ingalls unit’s revenues is pegged at $0.69 billion, which indicates a decline of 2.5% from the year-ago quarter’s figure.

Huntington Ingalls Industries, Inc. Price and EPS Surprise

Huntington Ingalls Industries, Inc. price-eps-surprise | Huntington Ingalls Industries, Inc. Quote

Newport News’ Revenues Likely to Fall

Lower sales volumes owing to continued performance challenges in the construction of aircraft carriers and Virginia class (SSN 774) submarines, along with reduced sales from naval nuclear support services, are likely to have impacted the Newport News segment’s revenue performance.

The Zacks Consensus Estimate for the Newport News unit’s revenues is pegged at $1.53 billion, which indicates a decline of 0.5% from the year-ago quarter’s figure.

Mission Technologies Unit Likely to Post Dismal Performance

Lower sales volumes from C5ISR (Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance and Reconnaissance) are likely to have negatively impacted the company’s Mission Technologies segment’s revenues in the second quarter of 2025.

The Zacks Consensus Estimate for this unit’s revenues is pegged at $0.74 billion, which indicates a decline of 2.8% from the year-ago quarter’s figure.

Q2 Estimates for HII Stock

Sales declines anticipated across all three of its major segments are likely to have adversely impacted the company’s overall second-quarter revenue performance.

The Zacks Consensus Estimate for HII’s second-quarter sales is pegged at $2.93 billion, which indicates a decrease of 1.6% from the prior-year number.

Lower operating margin in the Ingalls segment, due to poor performance from amphibious assault ships and supply-chain disruptions, is likely to have hurt its earnings in the second quarter. Additionally, dismal sales growth expectations are projected to have further impacted its overall bottom line.

The Zacks Consensus Estimate for HII’s second-quarter earnings is pegged at $3.23 per share, which indicates a year-over-year decline of 26.3%.

What the Zacks Model Unveils for HII

Our proven model does not conclusively predict an earnings beat for HII this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.

Earnings ESP: Huntington Ingalls has an Earnings ESP of -0.29%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: HII currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Below, we have mentioned players from the same sector that have the right combination of elements to beat on earnings in the upcoming releases.

Axon Enterprise (AXON) is set to report second-quarter 2025 earnings on Aug. 4, 2025, after market close. It has an Earnings ESP of +0.54% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for AXON’s earnings is pegged at $1.54 per share, indicating year-over-year growth of 28.3%. The consensus estimate for its sales is pegged at $642.2 million, indicating year-over-year growth of 27.4%.

CurtissWright (CW) is set to report its second-quarter 2025 results on Aug. 6, after market close. It has an Earnings ESP of +1.90% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for CW’s earnings is pegged at $3.09 per share, indicating year-over-year growth of 15.7%. The consensus estimate for its sales is pegged at $850.5 million, indicating year-over-year growth of 8.4%.

Transdigm Group (TDG) is expected to report fiscal third-quarter earnings soon. It has an Earnings ESP of +0.25% and carries a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for TDG’s earnings is pegged at $9.78 per share, indicating year-over-year growth of 8.7%. The consensus estimate for sales is pegged at $2.30 billion, indicating year-over-year growth of 12.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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