HUNTINGTON INGALLS INDUSTRIES, INC. SEC 10-Q Report

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2025.07.31 15:03
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Huntington Ingalls Industries, Inc. has released its Form 10-Q report for Q2 2025, revealing a 4% increase in sales to $3,082 million, but a 14% drop in operating income to $163 million. Net earnings fell by 12% to $152 million, with basic and diluted earnings per share at $3.86. The Ingalls and Newport News segments reported revenue increases, while operational challenges persist in aircraft carrier and submarine construction. The company anticipates recognizing 35% of remaining performance obligations as revenue through 2026, amid a complex geopolitical and economic environment.

Huntington Ingalls Industries, Inc., a leading American shipbuilding company and provider of professional services to partners in government and industry, has released its Form 10-Q report for the second quarter of 2025. The report highlights the company's financial performance and operational activities, providing insights into its revenue growth, segment performance, and future outlook amidst a challenging geopolitical and economic environment.

Financial Highlights

  • Sales and service revenues: $3,082 million, increased by 4% compared to the same period in 2024, primarily due to higher volumes at Newport News, Mission Technologies, and Ingalls.
  • Cost of product sales and service revenues: $2,687 million, increased by 6% compared to the same period in 2024, reflecting higher production activity levels.
  • Operating income: $163 million, decreased by 14% compared to the same period in 2024, primarily due to lower performance in the Newport News segment.
  • Net earnings: $152 million, decreased by 12% compared to the same period in 2024, reflecting lower operating income.
  • Basic earnings per share: $3.86, decreased from $4.38 in the same period in 2024, reflecting the decrease in net earnings.
  • Diluted earnings per share: $3.86, decreased from $4.38 in the same period in 2024, consistent with the basic earnings per share.

Business Highlights

  • Revenue Segments:
    • Ingalls Shipbuilding segment reported a 2% increase in revenues for the three months ended June 30, 2025, driven by higher volumes in surface combatants, despite lower volumes in amphibious assault ships.
    • Newport News Shipbuilding segment saw a 4% increase in revenues due to higher volumes in the Columbia class and Virginia class submarine programs.
    • Mission Technologies segment experienced a 3% increase in revenues, primarily due to higher volumes in C5ISR and live, virtual, and constructive training solutions.
  • Segment Operating Income:
    • Ingalls segment operating income decreased by 4% for the three months ended June 30, 2025, due to lower performance and contract incentives on amphibious assault ships.
    • Newport News segment operating income decreased by 26%, impacted by lower performance in the Virginia class submarine program and aircraft carrier construction.
    • Mission Technologies segment operating income remained consistent for the three months ended June 30, 2025, with changes in contract mix offsetting higher volumes.
  • Future Outlook: The company anticipates recognizing approximately 35% of its remaining performance obligations as revenue through 2026, with an additional 30% through 2028. The global geopolitical and economic environment continues to present challenges, with heightened geopolitical tensions and instability impacting operations.
  • Operational Challenges: Newport News segment continues to face performance challenges in the construction of aircraft carriers and the Virginia class submarine program. The company is working to address these issues to improve future performance.
  • Defense Spending Environment: The fiscal year 2026 budget process includes significant investments in shipbuilding, with the Department of the Navy requesting $47.4 billion for shipbuilding. The One Big Beautiful Bill Act, signed into law on July 4, 2025, provides over $29 billion for shipbuilding and the maritime industrial base, supporting the procurement of various naval vessels.
  • Contract Adjustments: For the three months ended June 30, 2025, Ingalls segment reported favorable contract adjustments in surface combatants, while Newport News segment faced unfavorable cumulative catch-up adjustments on aircraft carrier construction.
  • Geopolitical and Economic Environment: The company operates in a complex global security environment with threats from state and non-state actors, impacting the demand for defense products and services. The broader context includes financial market volatility, inflation, and a challenging labor market.

SEC Filing: HUNTINGTON INGALLS INDUSTRIES, INC. [ HII ] - 10-Q - Jul. 31, 2025

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