Huntington Ingalls Industries (HII) stock plummeted 15.11% in the pre-market trading session on Thursday, following the company's disappointing fourth-quarter 2024 earnings release.
The military shipbuilder reported revenue of $3 billion for the quarter, missing analysts' expectations of $3.05 billion to $3.1 billion. Earnings per share came in at $3.15, significantly below the consensus estimate range of $3.28 to $3.49.
A major factor behind the weak results was the underperformance of Huntington Ingalls' Newport News Shipbuilding unit. The segment witnessed a 4.6% revenue decline due to various issues, including weakness in aircraft carrier refueling and services, unfavorable adjustments on a submarine program, and lower naval nuclear support activity.
The company's operating margin for the quarter stood at a mere 3.7%, a substantial drop from 9.8% in the same period last year. This contraction was attributed to higher costs and supply chain challenges faced by the firm.
Analysts expressed concerns over Huntington Ingalls' ability to secure new contracts and improve operational efficiency, which could further impact its financial performance in the coming quarters.
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