Huntington Ingalls Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Huntington Ingalls Industries, Inc.’s HII second-quarter 2025 earnings of $3.86 per share declined 11.9% from $4.38 in the prior-year quarter. However, the bottom line beat the Zacks Consensus Estimate of $3.23 by 19.5%.

The year-over-year decline can be attributed to poor operating income performance and higher interest expense in the second quarter of 2025 compared with the second quarter of 2024.

Total Revenues

Revenues for the quarter totaled $3.08 billion, which beat the Zacks Consensus Estimate of $2.92 billion by 5.2%. The top line also improved 3.5% from $2.98 billion in the year-ago quarter, driven by higher sales volume from all three of its major business segments.

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 $172 million compared with $203 million in the second quarter of 2024. The segmental operating margin contracted 120 basis points from the prior-year figure to 5.6%.

The decline in operating income was primarily due to poor operating performance at all three business segments of the company.

HII received orders worth $11.9 billion in the second quarter of 2025. As a result, its total backlog reached $56.9 billion as of June 30, 2025, compared with $48 billion as of March 31, 2024.

Segmental Performance

Newport News Shipbuilding: Revenues in this segment totaled $1.60 million, up 4.4% year over year, primarily driven by higher volumes from the Columbia-class submarine and the Virginia-class submarine programs.

The segment’s operating income of $82 million decreased 26.1% year over year due to poor performance by the Virginia-class submarine program and aircraft carrier construction. 

Ingalls Shipbuilding: Revenues totaled $724 million, up 1.7% year over year. The improvement was driven by higher sales volumes from surface combatants. 

The segment reported operating earnings of $54 million, down 3.6% year over year, owing to lower performance and lower contract incentives from amphibious assault ships. 

Mission Technologies: Revenues in this segment totaled $791 million, up 3.4% year over year, driven by higher volumes from C5ISR and live, virtual, and constructive training solutions. 

Operating income remained flat year over year at $36 million.

Financial Update

Cash and cash equivalents, as of June 30, 2025, totaled $343 million, significantly down from $831 million recorded as of Dec. 31, 2024.

The long-term debt as of June 30, 2025, totaled $2.70 billion, in line with the 2024-end level.

The cash used in operating activities amounted to $428 million compared with $211 million a year ago.

HII’s free cash flow of $268 million as of June 30, 2025, was much higher than the free cash outflow of $373 million in the prior-year period.

2025 Guidance

Huntington Ingalls reaffirmed its 2025 guidance. The company still expects its shipbuilding revenues to be in the range of $8.9-$9.1 billion.

For Mission Technologies, HII continues to expect revenues in the range of $2.9-$3.1 billion.

The company now projects free cash flow to be in the band of $500-$600 million, up from the prior guidance of $300-$500 million.

Zacks Rank

Huntington Ingalls currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Q2 Defense Releases

RTX Corporation’s RTX second-quarter 2025 adjusted earnings per share of $1.56 beat the Zacks Consensus Estimate of $1.45 by 7.6%. The bottom line also improved 10.6% from the year-ago quarter’s level of $1.41.

RTX’s second-quarter sales totaled $21.58 billion, which surpassed the Zacks Consensus Estimate of $20.53 billion by 5.1%. The top line also surged a solid 9.4% from $19.72 billion recorded for the second quarter of 2024.

Lockheed Martin Corporation LMT reported second-quarter 2025 adjusted earnings of $7.29 per share, which beat the Zacks Consensus Estimate of $6.49 by 12.3%. The bottom line increased 2.5% from the year-ago quarter's reported figure of $7.11.

Net sales were $18.16 billion, which missed the Zacks Consensus Estimate of $18.56 billion by 2.2%. The top line, however, inched up 0.2% from $18.12 billion in the year-ago quarter.

Northrop Grumman Corporation NOC reported second-quarter 2025 adjusted earnings of $7.11 per share, which beat the Zacks Consensus Estimate of $6.71 by 6%.

NOC’s total sales of $10.35 billion beat the Zacks Consensus Estimate of $10.06 billion by 2.9%. The top line also rose 1.3% from $10.22 billion in the year-ago quarter.
 

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

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