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Huntington Ingalls (HII) Q4 Earnings Beat, Revenues Up Y/Y

Zacks Equity Research
·4-min read

Huntington Ingalls Industries, Inc.’s HII fourth-quarter 2019 earnings of $4.36 per share surpassed the Zacks Consensus Estimate of $4.24 by 2.83%. However, the reported figure declined 11.7% from $4.94 reported a year ago.

For 2019, the company reported earnings of $14.09 per share, which outpaced the Zacks Consensus Estimate of $13.87 by 1.6%. However, the bottom line declined 26.6% from $19.09 in the previous year.

Total Revenues

Total revenues came in at $2,412 million, exceeding the Zacks Consensus Estimate of $2,339 million by 3.1%. The top line also rose 9.7% from $2,199 million in the year-ago quarter. The upside can be attributed to higher sales volume at all three business divisions of the company.

In 2019, the company generated revenues of $8,899 million, which again outpaced the Zacks Consensus Estimate of $8,830 million by 0.8% and improved 8.8% from $8,176 million in the prior year.

Segment Details

Newport News Shipbuilding: Revenues totaled $1,390 million at this segment, up 8.8% year over year backed by higher revenues in submarine construction. Meanwhile, operating income surged 133.3% to $133 million owing to the receipt of the VCS Block V contract as well as contract changes for support services on Los Angeles-class submarines.

Ingalls Shipbuilding: Revenues at this segment came in at $702 million, up 0.4% year over year owing to higher revenues of the San Antonio-class LPD program and Legend-class National Security Cutter (NSC) program. However, operating income declined 29.8% to $59 million due to lower risk retirement on the LHA and LPD programs as well as recoveries related to a 2018 settlement agreement.

Technical Solutions: Revenues at this segment summed $369 million, up 38.2% year over year. The upside is primarily attributable to higher mission driven innovative solutions (MDIS) revenues as well as increased fleet support, and oil and gas revenues. Operating loss amounted to $19 million against the operating income of $7 million in the year-ago quarter.

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

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

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Backlog

Huntington Ingalls received new orders worth $9.7 billion in the fourth quarter. As a result, the company’s total backlog reached $46.5 billion as of Dec 31, 2019.

Financial Update

Cash and cash equivalents, as of Dec 31, 2019, were $75 million, significantly down from $240 million, as of Dec 31, 2018.

Long-term debt, as of Dec 31, 2019, was $1,286 million compared with the 2018-end level of $1,283 million.

Cash from operating activities, at the end of 2019, grossed $896 million compared with $914 million at the end of 2018.

Zacks Rank

Huntington Ingalls has a Zacks Rank #4 (Sell).

Recent Defense Releases

Teledyne Technologies Inc. TDY, a Zacks Rank #2 (Buy) company, reported fourth-quarter 2019 adjusted earnings of $2.90 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 5.1%. The bottom-line figure came above the guided range of $2.71-$2.76 for the reported quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lockheed Martin Corp. LMT, a Zacks Rank #3 (Hold) company, reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 in the year-ago quarter.

General Dynamics Corporation’s GD, a Zacks Rank #3 company, reported fourth-quarter earnings from continuing operations of $3.51 per share, which beat the Zacks Consensus Estimate of $3.46 by 1.45%.

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General Dynamics Corporation (GD) : Free Stock Analysis Report
 
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Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
 
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