Huntington Ingalls Industries, Inc.’s HII fourth-quarter 2024 earnings of $3.15 per share declined 54.3% from $6.90 in the prior-year quarter. The bottom line also missed the Zacks Consensus Estimate of $3.28 by 4%.

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The year-over-year decline can be attributed to poor sales as well as operating income in the fourth quarter of 2024 compared with fourth-quarter 2023. 

For 2024, the company registered earnings of $13.96 per share, which missed the Zacks Consensus Estimate of $14.09. The bottom line deteriorated from the year-ago reported figure of $17.07.

Total Revenues

Revenues for the quarter totaled $3 billion, which missed the Zacks Consensus Estimate of $3.03 billion by 0.9%. The top line also declined 5.4% from $3.18 billion recorded in the year-ago quarter due to lower sales volume from all of its business segments.

For 2024, HII’s revenues amounted to $11.54 billion, which lagged the Zacks Consensus Estimate of $11.56 billion. However, the top line inched up 0.7% from the year-ago reported figure of $11.45 billion.

Operational Performance

Huntington Ingalls reported segmental operating income of $103 million compared with $330 million in the fourth quarter of 2023. The segmental operating margin contracted 696 basis points from the prior-year figure to 3.4%. 

The deterioration in operating income was primarily due to lower performance at Newport News Shipbuilding unit, as well as the absence of the benefit of both the sale of a favorable court judgment in Ingalls Shipbuilding results and the favorable settlement of an insurance claim in Mission Technologies results of the previous year.  

HII received orders worth $12.1 billion in 2024. As a result, its total backlog reached $48.7 billion as of Dec. 31, 2024, compared with $49.4 billion as of Sept. 30, 2024.

Segmental Performance

Newport News Shipbuilding: Revenues totaled $1.59 billion in this segment, down 4.6% year over year. The deterioration was on account of lower volumes from aircraft carrier refueling and complex overhaul, unfavorable cumulative catch-up adjustments on the Virginia-class submarine program and aircraft carrier construction, as well as lower naval nuclear support service volumes.

The segment reported operating earnings of $38 million, down 65.5% year over year. This was due to lower performance in Virginia-class submarine construction and new carrier construction.

Ingalls Shipbuilding: Revenues in this segment totaled $736 million, down 8% year over year, primarily due to lower volumes from amphibious assault ships.

The segment’s operating income of $46 million plunged 72.8% year over year due to absence of the favorable sale of a court judgment and a contract incentive for surface combatants that benefited the operating income in the fourth quarter of 2023.

Mission Technologies: Revenues in this segment totaled $713 million, down 4.3% year over year due to lower volumes from C5ISR contracts.

Operating income declined 62.7% year over year to $19 million due to the absence of a favorable settlement of an insurance claim in the fourth quarter of 2023.

Financial Update

Cash and cash equivalents, as of Dec. 31, 2024, totaled $831 million, up from $430 million recorded as of Dec. 31, 2023.

The long-term debt as of Dec. 31, 2024, totaled $2.70 billion compared with the 2023-end level of $2.21 billion.

The cash flow from operating activities amounted to $393 million compared with $970 million a year ago.

HII generated a free cash flow worth $40 million in 2024 compared with $692 million in the prior-year period.

2025 Guidance

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

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

The company 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

The Boeing Company BA incurred an adjusted loss of $5.90 per share in the fourth quarter of 2024, wider than the Zacks Consensus Estimate of a loss of $3.22. The bottom line deteriorated from the year-ago quarter’s reported loss of 47 cents per share.

BA’s revenues amounted to $15.24 billion, which beat the Zacks Consensus Estimate of $15.19 billion by 0.4%. The top line also decreased 31% from the year-ago quarter’s reported figure of $22.02 billion.

Teledyne Technologies Inc. TDY reported fourth-quarter 2024 adjusted earnings of $5.52 per share, which surpassed the Zacks Consensus Estimate of $5.23 by 5.5%. The bottom line also improved 1.5% from $5.44 recorded a year ago.

The company’s total sales were $1.50 billion, which beat the Zacks Consensus Estimate of $1.45 billion by 3.7%. The top line also rose 5.4% from $1.43 billion reported a year ago. 

Hexcel Corporation HXL reported fourth-quarter 2024 adjusted earnings of 52 cents per share, which improved 20.9% from the year-ago quarter’s figure of 43 cents. The bottom line also surpassed the Zacks Consensus Estimate of 51 cents by 2%.

The company’s net sales were $473.8 million, which beat the Zacks Consensus Estimate of $471 million by 0.6%. The top line also witnessed an improvement of 3.6% from the year-ago quarter’s figure of $457.5 million.

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