Huntington Ingalls Q1 Earnings Beat Estimates, Revenues Decline Y/Y

By Zacks Equity Research | May 01, 2025, 12:24 PM

Huntington Ingalls Industries, Inc.’s HII first-quarter 2025 earnings of $3.79 per share declined 2.1% from $3.87 in the prior-year quarter. However, the bottom line beat the Zacks Consensus Estimate of $2.90 by 30.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The year-over-year decline can be attributed to poor sales performance in the first quarter of 2025 compared with first-quarter 2024.

Total Revenues

Revenues for the quarter totaled $2.73 billion, which missed the Zacks Consensus Estimate of $2.79 billion by 2%. The top line also declined 2.5% from $2.81 billion recorded in the year-ago quarter due to lower sales volume from all of its business segments.

Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise

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 $171 million compared with $170 million in the first quarter of 2024. The segmental operating margin expanded 19 basis points from the prior-year figure to 6.3%.

The improvement in operating income was primarily due to higher performance at the Newport News Shipbuilding and Mission Technologies units.

HII received orders worth $2.1 billion in the first quarter of 2025. As a result, its total backlog reached $48 billion as of March 31, 2025, compared with $48.7 billion as of Dec. 31, 2024.

Segmental Performance

Newport News Shipbuilding: Revenues in this segment totaled $1.40 million, down 2.6% year over year, primarily due to lower volumes from aircraft carriers and naval nuclear support services.

The segment’s operating income of $85 million increased 3.7% year over year. This was primarily driven by contract incentives from the Virginia-class submarine program and higher volumes from the Columbia-class submarine program.

Ingalls Shipbuilding: Revenues totaled $637 million in this segment, down 2.7% year over year. The deterioration was on account of lower volumes from amphibious assault ships.

The segment reported operating earnings of $46 million, down 23.3% year over year. This was due to lower performance in amphibious assault ships.

Mission Technologies: Revenues in this segment totaled $735 million, down 2% year over year due to lower volumes from C5ISR contracts.

Operating income increased 42.9% year over year to $40 million. This was primarily driven by higher performance in cyber, electronic warfare & space and uncrewed systems.

Financial Update

Cash and cash equivalents, as of March 31, 2025, totaled $167 million, significantly down from $831 million recorded as of Dec. 31, 2024.

The long-term debt as of March 31, 2025, totaled $2.70 billion, in line with the 2024-end level.

The cash used in operating activities amounted to $395 million compared with $202 million a year ago.

HII’s free cash outflow of $462 million in the first quarter of 2025 was much higher than $274 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 continue to expect revenues in the range of $2.9-$3.1 billion.

The company still projects free cash flow to be in the band of $300-$500 million.

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

Lockheed Martin Corporation LMT reported first-quarter 2025 earnings of $7.28 per share, which beat the Zacks Consensus Estimate of $6.34 by 14.8%. The bottom line increased 15% from the year-ago quarter's reported figure of $6.33 per share.

The company’s net sales were $17.96 billion, which beat the consensus estimate of $17.76 billion by 1.1%. The top line also increased 4.5% from $17.20 billion reported in the year-ago quarter.

Northrop Grumman Corporation NOC reported first-quarter 2025 adjusted earnings of $6.06 per share, which missed the Zacks Consensus Estimate of $6.21 by 2.4%.

NOC’s total sales of $9.47 billion in the first quarter missed the consensus estimate of $9.91 billion by 4.4%. The top line also declined 6.6% from $10.13 billion reported in the year-ago quarter.

RTX Corporation’s RTX first-quarter 2025 adjusted earnings per share of $1.47 beat the Zacks Consensus Estimate of $1.35 by 8.9%. The bottom line also improved 9.7% from the year-ago quarter’s level of $1.34, driven by growth in adjusted segment operating profit.

Its first-quarter sales totaled $20.31 billion, which surpassed the consensus estimate of $19.71 billion by 3%. The top line also surged a solid 5.2% from $19.31 billion recorded for the first quarter of 2024.

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