Huntington Ingalls Industries Aktienkurs
Vergleich mit Peer Group
📊 Peer Group
📈 Was ist das?
Die Peer Group sind die Unternehmen mit dem ähnlichsten Geschäftsmodell. Sie dienen als Vergleichsmaßstab, um eine Aktie einzuordnen.
🧮 Wie wird sie ausgewählt?
Nach Ähnlichkeit des Geschäftsmodells, also Unternehmen aus derselben Branche, mit vergleichbaren Produkten und einer ähnlichen Kundengruppe. Nur so vergleichst du Äpfel mit Äpfeln.
🏛️ Wofür ist sie wichtig?
Ob eine Aktie günstig oder teuer ist, lässt sich am ehesten im Vergleich beurteilen. Ein KGV von 18 oder ein EV/FCF von 20 wirkt je nach Maßstab günstig oder teuer. Die Peer Group liefert dabei den treffsichersten Maßstab: Unternehmen mit ähnlichem Geschäftsmodell, die denselben Bedingungen unterliegen.
🎯 Was bedeutet das für Anleger?
Liegt eine Kennzahl unter dem Peer-Durchschnitt, ist die Aktie relativ günstiger bewertet, über dem Durchschnitt entsprechend teurer. Ein Abschlag zur Peer Group kann eine Chance sein, aber auch einen Grund haben (zum Beispiel geringeres Wachstum). Der Vergleich ist ein Startpunkt, kein Urteil.
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📘 Marktkapitalisierung
📈 Was ist das?
Die Marktkapitalisierung zeigt, wie viel ein Unternehmen laut Börse aktuell wert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft Unternehmen in Größenklassen (Large, Mid, Small Cap) einzuordnen und gibt Hinweise auf Marktmacht und Stabilität.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Große Unternehmen gelten als stabiler, zahlen oft Dividenden, wachsen aber langsamer.
- Kleine Firmen können stärker wachsen, sind aber schwankungsanfälliger.
- Die Marktkapitalisierung ist ein guter Indikator für Unternehmensgröße, aber kein Maß für Unter- oder Überbewertung.
📘 Enterprise Value (Unternehmenswert)
📈 Was ist das?
Der Enterprise Value (EV) zeigt, was ein Unternehmen tatsächlich kostet, wenn man es komplett übernehmen würde – inklusive Schulden und abzüglich Cash.
🧮 Wie wird es berechnet?
(= Marktkapitalisierung + Nettoverschuldung)
🏛️ Wofür ist es wichtig?
Der EV ist eine realistischere Bewertungsbasis als die Marktkapitalisierung, da er die Kapitalstruktur berücksichtigt. Er ist Grundlage für Kennzahlen wie EV/FCF oder EV/Sales.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Der Enterprise Value zeigt, was ein Unternehmen tatsächlich wert ist – unabhängig davon, wie es finanziert ist.
- Er ist besonders wichtig für professionelle Investoren, da er eine objektivere Grundlage für Bewertungsvergleiche bietet als die Marktkapitalisierung allein.
- Ein Unternehmen mit hoher Verschuldung erscheint im EV teurer, eines mit viel Cash günstiger – auch wenn sie an der Börse gleich viel wert sind.
📘 Nettoverschuldung
📈 Was ist das?
Die Nettoverschuldung zeigt, wie viele Schulden nach Abzug des verfügbaren Cashs tatsächlich verbleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie zeigt, wie stark ein Unternehmen von Fremdkapital abhängig ist – und wie gut es in der Lage ist, seine Schulden kurzfristig zu bedienen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige oder negative Nettoverschuldung bedeutet hohe finanzielle Stabilität.
- Unternehmen mit viel Cash und geringer Verschuldung sind besser gerüstet für Krisen.
- Eine hohe Nettoverschuldung erhöht das Risiko – besonders bei steigenden Zinsen oder konjunkturellen Schwächen.
📘 Cash
📈 Was ist das?
Der Cashbestand zeigt, wie viele liquide Mittel einem Unternehmen sofort zur Verfügung stehen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Er gibt Auskunft über die finanzielle Flexibilität: Ein hoher Cashbestand ermöglicht Investitionen, Rückkäufe oder Krisenresistenz.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Cashbestand zeigt finanzielle Stärke und Handlungsspielraum.
- Cash kann für Investitionen, Schuldentilgung oder Aktienrückkäufe genutzt werden.
- Allerdings: Zu viel ungenutztes Kapital kann auch auf mangelnde Investitionsideen hinweisen.
📘 Anzahl ausstehender Aktien
📈 Was ist das?
Die Anzahl ausstehender Aktien gibt an, wie viele Aktien eines Unternehmens aktuell im Umlauf sind und von Investoren gehalten werden.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die Grundlage für viele Kennzahlen wie Gewinn je Aktie (EPS), Marktkapitalisierung oder KGV.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Je weniger Aktien im Umlauf sind, desto höher fällt z. B. der Gewinn je Aktie aus – wichtig für Bewertung und Dividendenrendite.
- Aktienrückkäufe verringern die Anzahl ausstehender Aktien – und steigern den Wert je Aktie.
- Kapitalerhöhungen haben den gegenteiligen Effekt: mehr Aktien → Verwässerung der bestehenden Anteile.
📘 Kurs-Gewinn-Verhältnis (KGV)
📈 Was ist das?
Das KGV zeigt, wie oft der Gewinn pro Aktie im aktuellen Aktienkurs enthalten ist – also wie „teuer“ eine Aktie im Verhältnis zum Gewinn ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KGV gehört zu den bekanntesten Bewertungskennzahlen. Es hilft Anlegern einzuschätzen, ob eine Aktie im Vergleich zu ihrem Gewinn eher günstig oder teuer erscheint.
🧮 Berechnung
📊 KGV (TTM) = bezogen auf den Gewinn der letzten 12 Monate (Trailing Twelve Months):🎯 Was bedeutet das für Anleger?
- Ein niedriges KGV kann auf eine günstige Bewertung hindeuten – oder auf Probleme im Geschäftsmodell.
- Ein hohes KGV kann Wachstumserwartungen widerspiegeln – oder eine überbewertete Aktie.
📘 Kurs-Umsatz-Verhältnis (KUV)
📈 Was ist das?
Das KUV zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen – unabhängig vom Gewinn.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KUV ist besonders bei wachstumsstarken oder noch nicht profitablen Unternehmen hilfreich. Es zeigt, wie hoch der Umsatz an der Börse bewertet wird.
🧮 Berechnung
Marktkapitalisierung = 10,40 Mrd. $ | Umsatz (TTM) = 13,19 Mrd. $
Marktkapitalisierung = 10,40 Mrd. $ | Umsatz erwartet = 13,48 Mrd. $
🎯 Was bedeutet das für Anleger?
- Ein niedriges KUV kann auf Unterbewertung hindeuten – oder auf schwache Margen.
- Ein hohes KUV kann hohe Erwartungen widerspiegeln – oder übermäßigen Optimismus.
- Besonders sinnvoll bei Wachstumsunternehmen, bei denen der Gewinn oder Free Cashflow (noch) keine Aussagekraft hat.
📘 Unternehmenswert zu Umsatz (EV/Sales)
📈 Was ist das?
EV/Sales zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen, wenn man auch Schulden und Cash berücksichtigt – es ist eine kapitalstrukturbereinigte Version des KUV.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl eignet sich besonders für den Vergleich von Unternehmen mit unterschiedlicher Verschuldung – sie zeigt, wie teuer ein Unternehmen tatsächlich im Verhältnis zum Umsatz ist.
🧮 Berechnung
Enterprise Value = 13,09 Mrd. $ | Umsatz (TTM) = 13,19 Mrd. $
Enterprise Value = 13,09 Mrd. $ | Umsatz erwartet = 13,48 Mrd. $
🎯 Was bedeutet das für Anleger?
- EV/Sales ist neutral gegenüber der Kapitalstruktur und eignet sich gut für Unternehmensvergleiche.
- Ein niedriges Verhältnis kann auf eine günstig bewertete Aktie hindeuten – ein hohes Verhältnis auf hohe Erwartungen oder Überbewertung.
- Besonders nützlich bei wachstumsstarken, noch nicht profitablen Firmen.
📘 Unternehmenswert zu Free Cashflow (EV/FCF)
📈 Was ist das?
EV/FCF zeigt, wie viele Jahre es dauern würde, bis ein Unternehmen seinen Unternehmenswert durch freien Cashflow „zurückverdient”.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Unternehmen auf Basis ihrer tatsächlichen Cash-Erträge zu bewerten – unabhängig von Bilanzierungsregeln oder buchhalterischem Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriges EV/FCF deutet auf eine günstige Bewertung bei starker Cashgenerierung hin.
- Ein hohes EV/FCF kann entweder auf Optimismus oder auf temporär schwachen Cashflow hindeuten.
- Besonders hilfreich bei reifen, profitablen Unternehmen mit stabilen Cashflows.
📘 Kurs-Buchwert-Verhältnis (KBV)
📈 Was ist das?
Das KBV zeigt, wie hoch der Marktwert eines Unternehmens im Verhältnis zu seinem bilanziellen Eigenkapital ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KBV ist besonders bei Substanzwerten (z. B. Banken, Industrie) relevant. Es hilft Anlegern zu erkennen, ob ein Unternehmen unter oder über seinem buchhalterischen Vermögen bewertet ist.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein KBV unter 1 kann auf Unterbewertung oder schwache Rentabilität hindeuten.
- Ein KBV über 1 zeigt, dass der Markt dem Unternehmen Mehrwert über den Buchwert hinaus zuschreibt (z. B. Marken, Patente, Wachstum).
- Das KBV eignet sich besonders gut für Unternehmen mit stabilen, materiellen Vermögenswerten.
📘 Dividende je Aktie
📈 Was ist das?
Die Dividende je Aktie zeigt, wie viel Geld ein Unternehmen pro Aktie an seine Aktionäre ausschüttet – typischerweise jährlich oder quartalsweise.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die absolute Größe der Auszahlung je Aktie – wichtig für alle, die regelmäßige Erträge suchen oder Dividendenstrategien verfolgen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine stabile oder wachsende Dividende je Aktie ist oft ein Zeichen für ein solides Geschäftsmodell.
- Die Dividende je Aktie allein sagt aber nichts über die Rendite – dafür ist auch der Aktienkurs relevant (→ Dividendenrendite).
- Langfristig steigende Dividenden sind oft ein sehr gutes Merkmal (z. B. Dividenden-Aristokraten).
📘 Dividendenrendite
📈 Was ist das?
Die Dividendenrendite zeigt, wie hoch die Dividende eines Unternehmens im Verhältnis zum Aktienkurs ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft dabei, Dividendenaktien vergleichbar zu machen – unabhängig vom absoluten Auszahlungsbetrag.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine stabile Dividendenrendite kann auf verlässliche Ausschüttungen hinweisen.
- Ein Vergleich der 1J- und 5J-Rendite hilft zu erkennen, ob das Dividendenwachstum mit dem Kurswachstum Schritt hält.
- Eine niedrige Rendite ist nicht zwingend negativ – sie kann auf starkes Kurswachstum hindeuten.
📘 Dividendenwachstum
📈 Was ist das?
Das Dividendenwachstum zeigt, wie stark ein Unternehmen seine Dividende je Aktie über die Zeit gesteigert hat.
🧮 Wie wird es berechnet?
5J: durchschnittliche jährliche Wachstumsrate (CAGR)
🏛️ Wofür ist es wichtig?
Stetig steigende Dividenden gelten als Zeichen für finanzielle Stärke und Aktionärsorientierung – besonders interessant für langfristige Investoren.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein stabiles Dividendenwachstum ist ein Zeichen nachhaltiger Ertragskraft.
- Ein hohes Dividendenwachstum kann ein erheblicher Hebel deiner Rendite sein:
- Wenn ein Unternehmen z. B. 1 € Dividende zahlt und diese über 5 Jahre jährlich um 15 % erhöht, bekommst du im 5. Jahr bereits 2 € je Aktie – doppelt so viel wie zu Beginn!
📘 Ausschüttungsquote (Payout)
📈 Was ist das?
Die Ausschüttungsquote zeigt, wie viel Prozent des Unternehmensgewinns (pro Aktie) als Dividende an die Aktionäre ausgeschüttet wird.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Quote hilft einzuschätzen, ob eine Dividende auf Dauer tragfähig ist – besonders im Verhältnis zum erzielten Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige Ausschüttungsquote bedeutet: Das Unternehmen behält einen größeren Teil des Gewinns für Investitionen – typisch für Wachstumsunternehmen.
- Eine moderate Quote (z. B. 25–50 %) steht oft für ein gesundes Gleichgewicht zwischen Ausschüttung und Zukunftsinvestitionen.
- Hohe Ausschüttungsquoten können attraktiv wirken, sind aber riskanter, wenn die Gewinne schwanken oder sinken.
📘 Dividendensteigerungen in Folge (Erhöhungen)
📈 Was ist das?
Diese Kennzahl zeigt, wie viele Jahre in Folge ein Unternehmen seine Dividende pro Aktie erhöht hat – ohne Kürzung oder Aussetzung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Ein langer Track Record kontinuierlicher Erhöhungen spricht für Verlässlichkeit, solide Finanzen und aktionärsfreundliche Unternehmenspolitik.
🎯 Was bedeutet das für Anleger?
- Ein langer Zeitraum mit Dividendensteigerungen stärkt das Vertrauen – besonders in Krisenzeiten.
- Solche Unternehmen gelten als verlässlich und planbar für Einkommensinvestoren.
- Je länger die Serie, desto stärker das Commitment gegenüber den Aktionären.
📘 Umsatz
📈 Was ist das?
Der Umsatz zeigt, wie viel ein Unternehmen insgesamt mit seinen Produkten und Dienstleistungen verdient – also den Bruttoerlös vor Abzug von Kosten.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Umsatz ist eine der zentralen Kennzahlen zur Einschätzung der Unternehmensgröße, Marktstellung und Wachstumskraft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein wachsender Umsatz zeigt eine steigende Nachfrage und kann ein guter Frühindikator für Gewinnsteigerungen sein.
- Vergleiche von aktuellem und erwartetem Umsatz geben Hinweise auf das Marktumfeld und Analystenerwartungen.
- Wichtig: Starker Umsatz allein genügt nicht – auch Margen und Profitabilität zählen.
📘 EBITDA
📈 Was ist das?
EBITDA steht für „Earnings Before Interest, Taxes, Depreciation and Amortization“ – also Gewinn vor Zinsen, Steuern und Abschreibungen. Es zeigt das operative Ergebnis eines Unternehmens, bereinigt um bilanztechnische und finanzierungsbedingte Effekte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBITDA ist eine verbreitete Kennzahl zur Beurteilung der operativen Leistungsfähigkeit – insbesondere bei kapitalintensiven Unternehmen oder im internationalen Vergleich.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes oder wachsendes EBITDA spricht für starke operative Erträge – unabhängig von Bilanzierung oder Steuerlast.
- EBITDA ist besonders nützlich, um Unternehmen branchenübergreifend zu vergleichen.
- Wichtig: EBITDA ist keine offizielle Gewinnkennzahl – Abschreibungen und Finanzierungskosten werden ausgeklammert.
📘 EBIT
📈 Was ist das?
EBIT steht für „Earnings Before Interest and Taxes“ – also Gewinn vor Zinsen und Steuern. Es zeigt das operative Ergebnis eines Unternehmens nach Abschreibungen, aber vor Finanzierungs- und Steueraufwand.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBIT ist eine zentrale Kennzahl zur Beurteilung der Profitabilität aus dem Kerngeschäft – unabhängig von Kapitalstruktur oder Steuersystem.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes EBIT deutet auf ein profitables Kerngeschäft hin – vor Zinslasten oder steuerlichen Effekten.
- Es erlaubt objektivere Vergleiche zwischen Unternehmen mit unterschiedlicher Finanzierung.
- Im Vergleich mit EBITDA zeigt EBIT bereits den Einfluss von Abschreibungen auf das operative Ergebnis.
📘 Nettogewinn
📈 Was ist das?
Der Nettogewinn ist der verbleibende Jahresüberschuss (oder -fehlbetrag) eines Unternehmens – nach Abzug aller Kosten, Steuern, Zinsen und Abschreibungen
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Nettogewinn ist die zentrale Erfolgskennzahl – er zeigt, wie profitabel ein Unternehmen nach allen Kosten tatsächlich arbeitet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein steigender Nettogewinn zeigt, dass das Unternehmen effizient wirtschaftet – trotz aller Kosten.
- Die Entwicklung des Gewinns beeinflusst z. B. direkt das KGV und weitere Kennzahlen.
- Im Zeitverlauf lässt sich ablesen, wie stabil und profitabel ein Geschäftsmodell wirklich ist.
📘 Free Cashflow (FCF)
📈 Was ist das?
Der Free Cashflow gibt Aufschluss über die echte finanzielle Stärke eines Unternehmens – unabhängig von Bilanzierungsregeln. Er zeigt, wie viel Spielraum für Dividenden, Aktienrückkäufe oder Schuldenabbau besteht.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow bedeutet, dass ein Unternehmen echte Finanzkraft besitzt – unabhängig vom bilanzierten Gewinn.
- Er ist oft die solideste Grundlage für nachhaltige Dividenden und Aktienrückkäufe.
- Sinkender FCF kann ein Warnsignal sein – auch wenn der Gewinn stabil aussieht.
📘 Umsatzwachstum
📈 Was ist das?
Das Umsatzwachstum zeigt, wie stark sich die Erlöse eines Unternehmens im Vergleich zum Vorjahr verändert haben – tatsächlich (TTM) und auf Prognosebasis (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (Umsatz erwartet ÷ Umsatz Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein wachsender Umsatz ist ein zentrales Signal für steigende Nachfrage, Geschäftsausweitung und Marktanteilsgewinne – besonders bei Wachstumsunternehmen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachstum ist der Motor langfristiger Wertsteigerung – besonders bei Technologie- und Wachstumsaktien.
- Wichtig ist nicht nur das aktuelle Wachstum, sondern auch dessen Nachhaltigkeit.
- Prognosen zeigen, ob Analysten weiteres Potenzial erwarten – oder eine Verlangsamung.
📘 EBITDA-Wachstum
📈 Was ist das?
Das EBITDA-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens vor Zinsen, Steuern und Abschreibungen im Vergleich zum Vorjahr gestiegen oder gesunken ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBITDA ÷ EBITDA Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein steigendes EBITDA ist ein Zeichen für verbesserte operative Ertragskraft – unabhängig von Finanzierungsstruktur oder Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Starkes EBITDA-Wachstum signalisiert operative Effizienz und Skalierung – besonders relevant in Wachstumsphasen.
- EBITDA-Wachstum ist ein Frühindikator für Margen- und Gewinnentwicklung – sollte aber stets im Zusammenhang mit Umsatz und EBIT betrachtet werden.
📘 EBIT Wachstum
📈 Was ist das?
Das EBIT-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens (nach Abschreibungen, aber vor Zinsen und Steuern) im Vergleich zum Vorjahr gewachsen ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBIT ÷ EBIT Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Das EBIT-Wachstum ist ein direkter Indikator für die wirtschaftliche Entwicklung des operativen Geschäfts – unter Berücksichtigung der Kapitalintensität (Abschreibungen).
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Steigendes EBIT signalisiert wachsende operative Rentabilität – auch unter Berücksichtigung von Abschreibungen.
- Das EBIT-Wachstum ist ein wichtiges Maß zur Beurteilung von Geschäftsmodellen mit hohen Investitionskosten.
- Im Zusammenspiel mit Umsatz- und EBITDA-Wachstum ergibt sich ein umfassendes Bild zur operativen Entwicklung.
📘 Nettogewinn-Wachstum
📈 Was ist das?
Das Nettogewinn-Wachstum zeigt, wie stark der Jahresüberschuss eines Unternehmens gegenüber dem Vorjahr gestiegen oder gesunken ist – sowohl tatsächlich (TTM) als auch auf Basis von Prognosen (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (erwarteter Nettogewinn ÷ Nettogewinn Vorjahr − 1) × 100
Der erwartete Wert basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Der Gewinn ist die entscheidende Ergebnisgröße für ein Unternehmen. Ein wachsender Nettogewinn deutet auf steigende Effizienz, stabile Kostenkontrolle und nachhaltige Ertragskraft hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachsender Nettogewinn stärkt die Bewertung, Dividendenfähigkeit und Kursfantasie.
- Stagnierender oder rückläufiger Gewinn trotz Umsatzwachstum kann auf Margendruck hinweisen.
📘 Free Cashflow-Wachstum
📈 Was ist das?
Das Free-Cashflow-Wachstum zeigt, wie sich der freie Mittelzufluss eines Unternehmens im Vergleich zum Vorjahr verändert hat – also der Betrag, der nach allen operativen Ausgaben und Investitionen übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Free Cashflow ist der echte, verfügbare Geldzufluss. Wachstum in diesem Bereich ist ein Zeichen für finanzielle Stärke und steigende Flexibilität bei Dividenden, Rückkäufen oder Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Sinkender Free Cashflow kann auf steigende Investitionen, höhere Kosten oder stagnierende operative Erträge hindeuten.
- Besonders bei Dividendenwerten ist das FCF-Wachstum wichtig – denn Dividenden werden letztlich aus dem verfügbaren Cash gezahlt.
- Ein negativer Trend sollte genauer analysiert werden – er ist nicht zwangsläufig schlecht, aber potenziell ein Warnsignal.
📘 Bruttomarge
📈 Was ist das?
Die Bruttomarge zeigt, wie viel vom Umsatz nach Abzug der direkten Herstellungskosten (Material, Produktion) als Bruttogewinn übrig bleibt – also der „Rohgewinn“ eines Unternehmens.
🧮 Wie wird es berechnet?
Auch: Bruttomarge = Bruttogewinn ÷ Umsatz × 100
🏛️ Wofür ist es wichtig?
Die Bruttomarge gibt Aufschluss über die Profitabilität eines Produkts oder Geschäftsmodells vor Fixkosten, Steuern und Zinsen. Sie zeigt, wie effizient ein Unternehmen produzieren oder einkaufen kann.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Bruttomarge deutet auf starke Preissetzungsmacht und effiziente Herstellung hin.
- Sinkende Bruttomargen können auf Kostensteigerungen oder Preisdruck hindeuten.
- Besonders im Vergleich zu Wettbewerbern liefert die Bruttomarge wertvolle Einblicke in die Geschäftsqualität.
📘 EBITDA-Marge
📈 Was ist das?
Die EBITDA-Marge zeigt, wie viel vom Umsatz als operativer Gewinn vor Zinsen, Steuern und Abschreibungen (EBITDA) übrig bleibt. Sie misst die operative Effizienz – ohne Verzerrungen durch Finanzierung oder Buchwerte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBITDA-Marge hilft zu verstehen, wie viel operativer Gewinn ein Unternehmen aus jedem Euro Umsatz erzielt – unabhängig von Kapitalstruktur oder steuerlichem Umfeld.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBITDA-Marge zeigt starke operative Ertragskraft – unabhängig von Bilanzierungseffekten.
- Die Marge ermöglicht gute Vergleiche zwischen Unternehmen und Branchen.
- Ein stabiler oder wachsender Wert kann auf effiziente Kostenkontrolle und Skalierbarkeit hindeuten.
📘 EBIT-Marge
📈 Was ist das?
Die EBIT-Marge zeigt, wie viel Prozent des Umsatzes als operativer Gewinn nach Abschreibungen, aber vor Zinsen und Steuern übrig bleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBIT-Marge misst die operative Ertragskraft eines Unternehmens unter Berücksichtigung der Kapitalintensität (z. B. Maschinen, Anlagen). Sie eignet sich gut zum Vergleich von Geschäftsmodellen mit unterschiedlich hohen Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBIT-Marge zeigt, dass ein Unternehmen auch nach Abschreibungen effizient arbeitet.
- Sie ist besonders relevant in kapitalintensiven Branchen.
- Langfristig stabile oder steigende Margen sind ein Zeichen wirtschaftlicher Stärke und Preissetzungsmacht.
📘 Nettomarge
📈 Was ist das?
Die Nettomarge zeigt, wie viel vom Umsatz am Ende als „Reingewinn“ übrig bleibt – also nach Abzug aller Kosten, Zinsen, Steuern und Abschreibungen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Nettomarge gibt an, wie effizient ein Unternehmen über alle Stufen hinweg wirtschaftet. Sie zeigt, wie viel Gewinn tatsächlich je Euro Umsatz übrig bleibt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Nettomarge zeigt, dass ein Unternehmen nicht nur operativ stark ist, sondern auch seine Finanzierung und Steuerbelastung im Griff hat.
- Vergleiche mit Wettbewerbern geben Einblicke in die wirtschaftliche Qualität.
- Sinkende Nettomargen trotz Umsatzwachstum können ein Warnsignal sein – etwa für steigende Kosten oder sinkende Effizienz.
📘 Free Cashflow Marge
📈 Was ist das?
Die Free-Cashflow-Marge zeigt, wie viel vom Umsatz nach Abzug aller operativen Ausgaben und Investitionen tatsächlich als freier Mittelzufluss übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Marge misst die echte Liquidität, die ein Unternehmen erwirtschaftet – unabhängig von Bilanzierungsregeln oder Abschreibungen. Sie ist besonders relevant für Dividenden, Rückkäufe und Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Free-Cashflow-Marge zeigt, dass ein Unternehmen nachhaltig liquide Mittel erwirtschaftet.
- Sie ist ein starkes Signal für finanzielle Stabilität und Ausschüttungspotenzial.
- Wichtig ist der langfristige Trend – sinkende Werte können auf steigende Investitionen oder rückläufige operative Effizienz hindeuten.
📘 Eigenkapitalquote
📈 Was ist das?
Die Eigenkapitalquote zeigt, wie hoch der Anteil des Eigenkapitals an der Bilanzsumme eines Unternehmens ist – also wie stark es sich aus eigenen Mitteln finanziert.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Eine hohe Eigenkapitalquote steht für finanzielle Stabilität, Krisenfestigkeit und gute Bonität. Sie ist besonders relevant bei der Beurteilung der Verschuldung.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalquote signalisiert finanzielle Stabilität – besonders in Krisenzeiten.
- Ein niedriger Wert kann auf ein höheres Risiko oder eine aggressive Verschuldung hinweisen.
- Wichtig: Die Eigenkapitalquote sollte immer gemeinsam mit der Eigenkapitalrendite betrachtet werden. Nur so lässt sich beurteilen, ob ein Unternehmen nicht nur solide, sondern auch effizient wirtschaftet.
📘 Eigenkapitalrendite (ROE)
📈 Was ist das?
Die Eigenkapitalrendite zeigt, wie effizient ein Unternehmen mit dem Kapital seiner Aktionäre arbeitet – also wie viel Gewinn es pro Euro Eigenkapital erwirtschaftet.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Eigenkapitalrendite ist eine zentrale Rentabilitätskennzahl. Sie hilft Anlegern zu erkennen, ob das Unternehmen eine attraktive Verzinsung auf das eingesetzte Eigenkapital erwirtschaftet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalrendite spricht für ein starkes, effizientes Geschäftsmodell.
- Besonders interessant ist sie bei kapitalintensiven Firmen oder solchen mit hoher Eigenkapitalquote.
- Wichtig: Ein sehr hoher ROE kann auch auf hohe Schulden hinweisen – daher sollte sie immer im Kontext mit der Eigenkapitalquote betrachtet werden.
📘 Return on Capital Employed (ROCE)
📈 Was ist das?
ROCE misst die Gesamtrentabilität eines Unternehmens – also wie effizient es das eingesetzte Kapital (Eigen- und Fremdkapital) zur Gewinnerzielung nutzt.
🧮 Wie wird es berechnet?
Das eingesetzte Kapital ist das gesamte betriebsnotwendige Kapital, unabhängig von der Finanzierungsquelle.
🏛️ Wofür ist es wichtig?
ROCE eignet sich besonders gut für den Vergleich unterschiedlich finanzierter Unternehmen. Es zeigt, wie effektiv ein Unternehmen Kapital investiert – unabhängig von der Kapitalstruktur.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROCE zeigt, dass ein Unternehmen sein Kapital effizient einsetzt – unabhängig davon, ob es durch Eigen- oder Fremdkapital finanziert ist.
- Je höher der ROCE im Vergleich zu ähnlichen Unternehmen, desto mehr Wert schafft das Unternehmen mit seinem investierten Kapital.
- Besonders wichtig ist der ROCE bei Firmen mit hohen Investitionen – z. B. in Industrie, Energie oder Infrastruktur.
📘 Return on Invested Capital (ROIC)
📈 Was ist das?
ROIC zeigt, wie effizient ein Unternehmen das Kapital investiert, das langfristig im operativen Geschäft gebunden ist – unabhängig davon, ob es aus Eigen- oder Fremdkapital stammt.
🧮 Wie wird es berechnet?
- NOPAT = „Net Operating Profit After Taxes“
- Investiertes Kapital = operatives Vermögen abzüglich nicht-verzinster Schulden
🏛️ Wofür ist es wichtig?
ROIC ist eine der präzisesten Kennzahlen zur Bewertung der Kapitalrendite – besonders im Vergleich zur Eigenkapitalrendite, weil es Verzerrungen durch Schulden vermeidet. Er zeigt, ob ein Unternehmen Mehrwert für alle Kapitalgeber schafft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROIC zeigt, wie gut ein Unternehmen mit dem tatsächlich investierten (betriebsnotwendigen) Kapital wirtschaftet.
- Im Unterschied zu ROCE wird nur Kapital betrachtet, das wirklich zur Finanzierung operativer Aktivitäten dient – und verzinst werden muss.
- Besonders hilfreich, um die Kapitalrendite von Unternehmen mit viel „überschüssigem“ Kapital oder zinsfreien Verbindlichkeiten realistisch zu vergleichen.
📘 Verschuldungsgrad (Leverage Ratio)
📈 Was ist das?
Der Verschuldungsgrad zeigt, wie stark ein Unternehmen durch verzinsliche Schulden (z. B. Kredite und Anleihen) im Verhältnis zum Eigenkapital finanziert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Kennzahl hilft, das finanzielle Risiko und die Abhängigkeit von Fremdkapital zu beurteilen. Ein hoher Verschuldungsgrad kann die Eigenkapitalrendite steigern – birgt aber auch erhöhte Risiken bei Zinsanstiegen oder Liquiditätsengpässen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Verschuldungsgrad steht für finanzielle Stabilität und Unabhängigkeit.
- Ein hoher Wert kann auf erhöhte Risiken hinweisen – insbesondere bei schwankenden Zinsen oder konjunkturellen Schwächen.
- Wichtig: Immer im Kontext zur Branche und Kapitalintensität bewerten.
📘 Ergebnis je Aktie (EPS)
📈 Was ist das?
Das Ergebnis je Aktie (EPS) zeigt, wie viel Gewinn auf eine einzelne Aktie entfällt – und ist eine der wichtigsten Kennzahlen zur Bewertung von Unternehmen.
🧮 Wie wird es berechnet?
Die verwässerte Aktienanzahl berücksichtigt auch potenzielle neue Aktien, etwa durch Optionen, Wandelanleihen oder andere Umtauschrechte.
🏛️ Wofür ist es wichtig?
EPS bildet die Basis für viele Bewertungskennzahlen wie KGV, PEG oder Payout Ratio. Es macht den Gewinn für Aktionäre vergleichbar – unabhängig von der Unternehmensgröße.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- EPS hilft, die Profitabilität pro Aktie zu erfassen – und ist besonders wichtig im Zeitvergleich oder im Vergleich mit Analystenschätzungen.
- Steigendes EPS kann ein Zeichen für stabiles Wachstum oder Aktienrückkäufe sein.
- Wichtig: Verwende verwässertes EPS für realistische Bewertungen – besonders bei stark aktienbasierten Vergütungssystemen.
📘 Free Cashflow je Aktie (FCF je Aktie)
📈 Was ist das?
Der Free Cashflow je Aktie zeigt, wie viel freier Mittelzufluss einem Unternehmen pro Aktie zur Verfügung steht – nach Investitionen, aber vor Dividenden oder Schuldentilgung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der FCF je Aktie zeigt, wie viel liquide Mittel pro Aktie tatsächlich im Unternehmen verbleiben – wichtig für Dividenden, Aktienrückkäufe oder Schuldentilgung. Im Gegensatz zum Gewinn ist er schwerer manipulierbar und daher besonders aussagekräftig.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow je Aktie ist ein Zeichen für hohe finanzielle Flexibilität.
- Er zeigt, wie viel Kapital ein Unternehmen effektiv einsetzen oder ausschütten kann.
- Besonders relevant für dividendenstarke Unternehmen oder solche mit starker Kapitalrendite.
📘 Short Interest
📈 Was ist das?
Short Interest zeigt, wie viele Aktien eines Unternehmens aktuell leerverkauft wurden – also von Investoren geliehen und verkauft, in der Erwartung fallender Kurse.
🧮 Wie wird es berechnet?
Der Wert zeigt den Anteil der Aktien, der aktuell auf fallende Kurse spekuliert wird.
🏛️ Wofür ist es wichtig?
Short Interest dient als Stimmungsindikator: Ein hoher Wert deutet auf Skepsis oder negative Erwartungen gegenüber dem Unternehmen hin – kann aber auch zu einem „Short Squeeze“ führen, wenn der Kurs plötzlich steigt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Short Interest deutet auf Vertrauen in das Unternehmen hin.
- Ein hoher Wert kann ein Warnsignal sein – oder eine Chance, wenn sich die Stimmung dreht.
- Besonders spannend in volatilen Märkten oder vor wichtigen Quartalszahlen.
📘 Employees
📈 Was ist das?
Die Mitarbeiteranzahl zeigt, wie viele Personen ein Unternehmen weltweit beschäftigt – ein Indikator für Größe, Struktur und Geschäftsmodell.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft bei der Einschätzung von Skaleneffekten, Effizienz und Personalkosten. Zusammen mit Umsatz und Gewinn lassen sich Kennzahlen wie Produktivität je Mitarbeiter ableiten.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Viele Mitarbeiter bedeuten große operative Komplexität – aber auch hohes Umsatzpotenzial.
- Produktivität je Mitarbeiter ist ein wichtiger Indikator für Effizienz.
- Besonders spannend bei stark wachsenden Tech- oder Industrieunternehmen.
📘 Umsatz je Mitarbeiter
📈 Was ist das?
Der Umsatz je Mitarbeiter zeigt, wie viel Erlös ein Unternehmen durchschnittlich pro Beschäftigtem erwirtschaftet – eine Kennzahl für Effizienz und Produktivität.
🧮 Wie wird es berechnet?
Die Mitarbeiterzahl stammt in der Regel aus dem letzten verfügbaren Jahresbericht.
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Geschäftsmodelle zu vergleichen – insbesondere zwischen arbeitsintensiven und technologiegetriebenen Unternehmen. Ein hoher Wert deutet auf Automatisierung, Effizienz oder hohen Wertschöpfungsanteil hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Umsatz je Mitarbeiter spricht für ein skalierbares und margenstarkes Geschäftsmodell.
- Ein niedriger Wert kann auf arbeitsintensive Prozesse oder geringere Wertschöpfung hinweisen.
- Besonders hilfreich beim Vergleich von Tech- vs. Industrieunternehmen.
Huntington Ingalls Industries Aktie Analyse
Analystenmeinungen
17 Analysten haben eine Huntington Ingalls Industries Prognose abgegeben:
Analystenmeinungen
17 Analysten haben eine Huntington Ingalls Industries Prognose abgegeben:
Huntington Ingalls Industries Events
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Huntington Ingalls Industries — Q2 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by, and welcome to the Second Quarter 2026 HII Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]
I would now like to hand the call over to Christie Thomas, Vice President of Investor Relations. Mr. Thomas, you may begin.
Thank you, operator, and good morning, everyone. Welcome to the HII Second Quarter 2026 Conference Call. Matters discussed on today's call that constitute forward-looking statements, including our estimates regarding the company's outlook, involve risks and uncertainties and reflect the company's judgment based on information available at the time of this call. These risks and uncertainties may cause our actual results to differ materially. Additional information regarding these factors is contained in today's press release and the company's SEC filings. We will also refer to certain non-GAAP financial measures. .
For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations page of our website at ir.hii.com.
On the call today are Chris Kastner, President and Chief Executive Officer; Brian Blanchette, Executive Vice President and President of InglShipBuilding; and Tom Stiehle, Executive Vice President and Chief Financial Officer. Now I'll turn the call over to Chris.
Thanks, Christie. Good morning, everyone. This morning, we released our second quarter results, which reflect our continued focus and progress on increasing throughput and delivering ships and mission solutions to the nation's sailors, marines and war fighters.
I'll start today by providing the Q2 results, highlights from Newport News shipbuilding emission technologies and an update on our operational initiatives. Brian Blanchette, President of Ingalls Shipbuilding has joined me to discuss Ingall's updates, and then Tom will provide more details on our financial performance and outlook.
Now turning to our results. We reported second quarter sales of $3.4 billion and diluted earnings per share of $5.27. Shipbuilding sales were $2.7 billion, 16% ahead year-over-year and reflect our fourth consecutive quarter of double-digit growth. Given this momentum and our plans to deliver 5 ships over the next year, we are raising our 2026 shipbuilding revenue guidance to between $10.2 billion and $10.4 billion and our 2026 shipbuilding margin guidance to between 6% and 6.5%. At the same time, customer demand for our products and services remain strong, Second quarter contract awards were $6.7 billion.
At Newport News, CVN 79 Kennedy successfully completed builder's trials earlier this year and we expect to achieve preliminary acceptance later this year with final ship delivery in 2027. CVN-80 enterprise continues to gain momentum and has achieved 64% erected. We expect to lay the keel for CVN-81 later this year. And on submarines, SSN 800 Arkansas is progressing towards delivery later this year.
Shifting to Mission Technologies. We delivered another strong quarter with $760 million in sales and above 10% EBITDA margin, reflecting steady demand and disciplined execution. The division secured several major awards this quarter, including a recompete award of $418 million to continue supporting ship word-based elevators across U.S. Navy aircraft carriers and amphibious ships.
Romulus unmanned surface vessel advanced to the U.S. Navy's MUSV ATC testing phase scheduled for September, a major milestone in this development. We also broadened our REMUS industrial base through new partnerships with Bayou Metals and Halamar shipbuilding, strengthening production capacity and scalability. Additionally, we secured the next production option for the Navy's Line fish, small unmanned undersea vehicle program, further demonstrating how our commercial Remus 300 has successfully evolved into the Navy's preferred next-generation EUV.
The growth in budgets for autonomous products, coupled with a strong domestic and international pipeline point to a potential significant growth in this market space, our proven products and technologies along with our partnerships with commercial technology leaders, put us in a position to take advantage of this market inflection. For example, we recently announced our partnership with Applied and tuition to develop and integrate AI defined capabilities for next-generation naval platforms in maritime manned, unmanned teaming.
Moving to an update on our operational initiatives, increasing shipbuilding throughput continues to be a main focus. Year-to-date, we've achieved a 12% improvement over 2025 and with plans in place to meet our full year goal of 15%. Throughput improvements are expected to accelerate in the second half of the year as we hit more milestones and deliveries. Year-to-date, we've hired over 3,500 shipbuilders. We continue to gain traction with attracting new shipbuilders from pipeline programs, providing a foundation for our future workforce. Also, we are on track to increase distributed shipbuilding by 30% this year.
We continue to evaluate meaningful opportunities to bring more capacity into the shipbuilding space, including additional shipyard facilities. Finally, an agreement has been reached on VCS Block VI and the next Columbia submarine contracts. These contracts represent critical demand signals and stability, not just for our workforce but for the thousands of suppliers across the country who provide parts for these submarines.
Turning to activities in Washington. The President submitted its fiscal year 2027 budget request in April, which is now under consideration by Congress. As bills progress through both chambers, we continue to see bipartisan support for our programs reflected in the defense authorization and appropriation bills in the House and the Senate. The House appropriations bill adds funding for the submarine industrial base to invest in critical areas, including supplier capacity and capability, strategic outsourcing, workforce training, technology and infrastructure.
We await the Senate appropriations position and final outcomes will depend on eventual respective conference committee negotiations. Now to summarize my remarks, with a solid second quarter and are beginning to see positive momentum from continued investments in shipbuilding in the maritime industrial base. We are focused every day on meeting our operational commitments to the Navy and delivering 5 ships over the next 12 months. And now I'll turn the call over to Brian for his remarks on Ingalls.
Thank you, Chris, and good morning, everyone. With 13 ships currently in construction, Ingalls Shipbuilding has had a productive first half of the year. The shipyard is building 6 destroyers, 3 LPDs, 2 LHAs and supporting work on DDG 1000 and DDG 1002, [Audio Gap] we are also purchasing material and doing preproduction work for an additional dozen ships under contract.
Today, I'll provide an update on our ship delivery progress our distributed shipbuilding strategy and our continued focus on workforce readiness. On the destroyer program, we ended 2025 and with the successful delivery of DDG 128 Ted Stevens. The ship sailed away in the second quarter of 2026, marking the 36 DDG-51 Arle Bert class destroyer and second Flight III destroyer, Ingalls has delivered to the fleet. This year, we also loaded fuel and lit off generators on DDG 129 Geremia Denton as we prepare for her planned delivery in 2027.
Across the destroyer line, we continue to make steady progress. We launched an crisaned DDG-131, George Neil, achieved store release and 100% well complete on DDG 133 SAM 9 and loaded men-machinery on DDG 135 [indiscernible]. We also reached 25% but well complete on DDG 135 and have received all 4 units from our distributed shipbuilding partners. DDG 137, John F. Lehman received 2 additional outsourced units and celebrated her first milestone, start fab, capitalizing on the growing value of this production approach.
On the amphib programs, LPD 30 Harrisburg powered up main engines in the second quarter and is progressing towards delivery this year. On LPD-31, Pittsburgh, the forward and deck houses were landed, and we laid the keel of LPD 32 Philadelphia. On LHA-8 Buggenville, we continue to ramp up the test program as we prepare for her planned delivery in 2027. We also completed sea trials for DDG-1000, USS Zoom Walt and achieved crew move board earlier this year.
And finally, in April, Ingalls was awarded the Frigate lead yard support contract to procure long lead time material, execute design work, and begin preconstruction activities for the first ship. Ingalls is also continuing to increase production capability through new technology investments and additional distributed shipbuilding partners along the Gulf Coast. This strategy allows selected units to be built off-site and integrated in Pascagoula, creating a dual production path that supports greater throughput.
Inside our shipyard, we remain focused on workforce development by pairing targeted hiring with advanced training and onboarding technologies we are working to build a stronger workforce pipeline, increased readiness and improve retention. Supporting these efforts we successfully reached an updated collective bargaining agreement with our union partners in March, and we are seeing early indications that the higher wages have a positive impact on our ability to hire and retain skilled shipbuilders.
In summary, the Ingalls team is focused on delivering 3 ships over the next 12 months increasing production pace through distributed shipbuilding and strengthening the workforce required to deliver on our commitments.
Now I'll hand the call over to Tom for some remarks on our financial results. Tom?
Thanks, Brian, and good morning. Let me start by discussing our second quarter results, and then I'll provide some color on our expectations for the remainder of the year. For more detail, please refer to the earnings release issued this morning and posted to our website.
Beginning with our consolidated results on Slide 5 of the presentation, our second quarter revenues of approximately $3.4 billion increased 10.9% compared to the same period last year. The higher revenue was attributable to stronger year-over-year growth at both shipyards.
Ingall's revenues were $845 million and increased by 16.7% compared to the second quarter 2025, driven primarily by higher volumes in amphibious assault ships. Newport News revenues of $1.8 billion increased by 15.3% compared to the second quarter of 2025. And driven by higher volumes across aircraft carriers and submarines. Together, share building revenue was $2.7 billion, up 15.7% year-over-year.
Mission Technologies revenues of $760 million decreased by 3.9% compared to the second quarter of 2025, primarily due to lower volumes in all domain operations in Global Security, partially offset by higher volumes in Warfare Systems and Unmanned Systems. This result is modestly better than the guidance we had given for the quarter, as the prior year results included approximately $45 million of revenue related to a nonrecurring contract resolution. Excluding that impact, Mission Technologies revenues grew modestly year-over-year on an organic basis.
Moving on to Slide 6. Segment operating income of $224 million and segment operating margin of 6.6% in the second quarter of 2026 compared to $172 million and 5.6% in the second quarter of 2025. At Ingalls, segment operating income was $58 million and operating margin was 6.9% compared to $54 million and 7.5% in the second quarter of last year. The increase in segment operating income was driven by higher volumes in amphibious assault ships partially offset by favorable contract adjustments in surface combatants in the second quarter of 2025.
The second quarter net cumulative adjustment at Ingalls was a negative $2 million and none of the adjustments were individually significant. At Newport News, segment operating income was $111 million, an operating margin of 6% compared to $82 million and 5.1% in the second quarter of 2025. The increase in segment operating income was primarily driven by contract adjustments and incentives in aircraft carriers and the higher volumes I described earlier, partially offset by lower performance in aircraft carriers.
For the second quarter of 2026, Newport News Shipbuilding's net cumulative adjustment was positive $8 million. The quarterly result did include meaningful positive and negative adjustments within the carrier refueling and complex overhaul program as we incorporated change settlements and realign risk and expectations across that program. As Chris mentioned, we reached agreement on the submarine contracts. The contract definitization is contemplated in our third quarter guidance.
Moving on, Mission Technologies segment operating income was $55 million and operating margin was 7.2% compared to $36 million and 4.6% in the second quarter of 2025. The increase in segment operating income was primarily due to higher equity income from nuclear and environmental joint ventures. For the second quarter of 2026, Mission Technologies' net cumulative adjustment was a positive $4 million. None of the adjustments in the quarter were individually significant.
Consolidated operating income for the quarter was $210 million, and operating margin was 6.1%, compared to $163 million and 5.3% in the same period last year. The increase in operating income was driven by the favorable segment operating income that I just reviewed, partially offset by higher noncurrent state income tax expense and the operating FAS/CAS adjustment.
Net earnings in the quarter were $208 million, and diluted earnings per share were $5.27, up from $152 million and $3.86 in the same period last year. The effective tax rate in the second quarter was 18.1%. This was below the guidance of 21% that we previously provided, primarily due to favorable tax impacts related to stock award settlement activity.
Turning to Slide 7. Cash used in operations was $31 million in the quarter. Net capital expenditures were $119 million or 3.5% of revenues. Free cash flow results in the quarter came in below the forecast we provided on the last earnings call, largely due to timing of receipts and disbursements between quarters. There's no change to our free cash flow expectation for the year, which I will provide some more color on in a moment.
During the quarter, we did not repurchase any shares. We did pay a cash dividend of $1.38 per share or $55 million in aggregate.
Turning to liquidity and the balance sheet. We ended the quarter with a cash balance of $12 million and liquidity of approximately $1.7 billion.
Moving on to our outlook on Slide 8. We are increasing our expectation for shipbuilding revenue for the year as well as bringing up the bottom end of the shipbuilding operating margin range for 2026. We now expect shipbuilding revenue between $10.2 billion and $10.4 billion and expect shipbuilding operating margin in the range between 6% and 6.5%. We are reiterating all other aspects of our guidance for 2026, including the expectations for Mission Technologies revenue of between $3 billion and $3.2 billion and Mission Technologies segment operating margins of approximately 5%.
I'll note that we continue to see the new battleship and frigate programs as meaningful upside opportunities to our medium-term outlook. That we will need additional details before we can include those in our guidance outlook.
Moving on to the third quarter look ahead outlined on Slide 8. We expect shipbuilding revenue of approximately $2.6 billion and shipbuilding operating margin that is similar to the second quarter result of 6.3%. For Mission Technologies, we expect revenues will be similar to the second quarter results of $760 million and operating margin of approximately 4%, inclusive of strategic investments that we expect to make in our unmanned capability and production capacity.
We expect free cash flow in the third quarter to be approximately $100 million. This does mean that we expect significant free cash flow generation in the fourth quarter to meet our guidance for the full year of between $500 million and $600 million. We are reiterating that outlook and do expect meaningful positive cash impacts from contract advances and incentives as well as favorable cash tax impacts in the fourth quarter.
Regarding the effective tax rate, we believe it is prudent to use our tax rate of 21% for the third quarter, but we still believe 17% is appropriate for 2026 and with an expected research and development tax credit expected in the fourth quarter at the end of the year.
To close, it was another good quarter as we continue to make steady progress and execute against our 2026 operational initiatives. We are pleased to improve the shipbuilding expectations for the year and remain focused on executing our plan.
With that, I'll turn the call back over to Christie to manage Q&A.
Thanks, Tom. [Operator Instructions] Operator, I will turn it over to you to manage the Q&A. .
[Operator Instructions]Your first question comes from the line of John Godyn with Citi.
2. Question Answer
Obviously, a great kind of margin quarter. You raised shipbuilding margins and you're tracking in line with the full year guidance. I was hoping you could shed some light on how to think about shipbuilding margins through the remainder of the year just by quarter. And at the same time, it would be helpful to step through any of the remaining milestones just to calibrate everybody's expectations on timing.
Sure, John. I think Tom indicated where we think we're going to be in Q3. And then if you look at the full year, you can kind of see how we're thinking about margin for the balance of the year. But from a from a milestone standpoint, delivery of 30 will be towards the end of the year. It will go to trials here in Q3. 79 is actually going to go to trials here in a couple of weeks or a week or 2. We expect that to proceed and that's on schedule. 800 towards the end of the year, some real critical milestones coming up in the summer here or the later part of the summer related to 800.
So those are the remaining milestones, laying the keel of 81 on schedule towards the back half of the year, but I don't anticipate a lot of margin related to that. So -- those are the 26 milestones. 27 is all still in place, and we're proceeding on those as well.
Okay. Got it. And clearly, executing well operationally, trends are moving in the right direction. But are there any additional data points you can share on improving throughput, productivity, reducing costs just to help paint a picture of how far you've come and how much more there is to go?
Yes, we've made real good progress, right? We had 14% last year in throughput. We expect 15% this year. Newport News has had a great start of the year over the first 2 quarters relative to throughput, primarily on the submarine programs. Ingalls had a bit of a slow start this year related to labor and labor growth and that's really tied to getting their labor agreement done in March. I actually, fortunately enough, have Brian here, Blanchette, for Ingalls Building. He can talk about what they're doing from a labor standpoint and how the ships are progressing through the factory there.
Thanks, Chris. As Chris said, we signed an updated collective bargaining agreement at the end of the first quarter, and it was really a win-win-win agreement, good for the workforce, good for us, good for the Navy. And we saw immediate benefit from a retention standpoint but there's a little bit of a lag from a hiring standpoint just as Newport News saw when they did some wage adjustments last year. But we're starting to see some good positive indicators on hiring. We have all of our pipeline programs are going really well.
Our apprentice school is near full capacity the next class that we take in, in the next month or so, should put us there. Our high school programs are going great, had an excellent signing day ceremony in the spring and our biggest class ever for that. So we're excited about where we're headed. As Chris said, it was a bit of a slow start, but we're positive about the second half of the year.
Yes. I can add to that we are delivering 5 ships over the next 12 months. I said that in my script as well, 3 of those in Ingalls. So it's critical we get through those on schedule to get those ships to the Navy, but also critically, you going to rotate those crews to the next ships in the production line. So that's also very important.
Your next question comes from the line of Noah Poponak with Goldman Sachs.
The updated -- a few questions on the updated guidance. So the new shipbuilding range -- revenue range implies the back half 3Q and 4Q combined are kind of flat year-over-year. Maybe you can help us out with why you'd be flat in the back half versus the double-digit growth in the first half. And specifically, I think it implies 3Q is up about 6% and 4Q is down about 6%, what drives 4Q down?
And then on the shipbuilding margin forecasting it kind of flattish sequentially. Could you talk a little bit more about the moving pieces there because I thought you had explained previously that whenever you captured the contracts on the next batch of subs, there were maybe payments associated with that, plus the retroactive catch-up of having had booked long lead at very low margin. If you could help out with those things.
I appreciate that. On the revenue side, as you mentioned and said in the remarks, we did upscale the expectations for shipbuilding by $0.5 billion, both the low end and the top end it is true when you do the math of that actual is now in Q1, Q2, plus the guide for Q3, where that could land in Q4. That ranges from the $10 billion, $4 billion across the whole year, the Q4 that would be anywhere from $2.5 million to $2.7 million, and you're right, if you look at it compared to where we just finished up almost at $2.7 million with the guided [ 26% ] and then compared to Q4 of last year, it seems like it's flat, if anything, kind of pulls back a little bit. But a couple of points to come back on that.
One, in Q4 of last year was a big material quarter for both sides, but specifically that at Ingalls. So that's a positive guide. And then also, there's probably a little conservative in there. We want to see both the material. The labor continue to inflect upward at Ingalls. The material as plan to come in here. I wouldn't overly focus the year-over-year guide being flat or maybe slightly negative to Q4 but the fact that the matter that we've had 4 now quarters in a row, both for HII and in shipholding 4 quarters to row of double-digit growth. So we're out in front of our 6% medium-term guide.
And I feel really comfortable about that. I think we just want to see it occur and happen. And again, it's a tough comp against Q4 to 2025 in shipbuilding. On the margin side there, again, it's the same story, where given the same 6.3% for Q3, kind of guidance that we just came through for 6.3% for this quarter. You heard last night that we did get the sub-awards which bring meaningful revenue, more commitment in statement of work and CapEx and incentive opportunities in that. So I would tell you that a piece of Q2 had incentives in there. We did not want to wait -- we had an agreement with the Navy to get started on those incentives.
So the Q2 has a piece of the incentives baked into it. And going forward, there's additional incentives that come about with the ward in Q3. I would tell you it's on the early side. You can imagine just putting that on contract, adjusting the booking rates, more contract value, much statement work, more capital commitment, and then the time to actually -- even though there's capital incentives on there, there's time and contract incentives, we need time to actually meet the milestones, meet the criteria and be able to kind of book that and eventually get the cash at the end of the year. So I'm quite comfortable with that.
Perspective again, just like I gave you on the revenue. On the margin side, if you look at the march-up that we've had whether we talk about where we've been in quarterly shipbuilding from 5.5% in Q4 of last year to 5.7% in Q1 of this year to now 6.3%. That's the nice incremental march that we've kind of forecasted that was coming about as the portfolio would change over and with these subcontract boat awards. And then just from a fiscal perspective, we've seen 5.2% [ rosinshipbuilding ] in '24, 5.9% in 2025. And now raising the guidance from 5.5% to 6.5% to now 6.0% to 6.5%, a midpoint of 6.25%, again, a progression both quarterly and annually on how the company is moving forward here as we -- the investments are paying off input, output, top line is growing, incremental improvement on the bottom. So I'm quite comfortable with both the quarter itself and where we're projecting the end of the year is going to be.
Okay. Great. Tom, I appreciate all that detail. Yes, I guess just should we think of last night's contracts as in the outlook you're providing today or incremental to the outlook you're providing today? Because I guess you're technically giving us this post the contracts, but you're also, I assume, not formulating your earnings report and guidance only the night prior.
Yes. So I'll square that up for you. As I mentioned earlier, in the Q2 results already was a cadre of the incentives, right? We had an agreement, and that was booked in Q2. And then with the awards last night, there's additional incentives that come about that and that's rolled into the guidance in Q3. We had an expectation of understanding. We've been saying for a while that first and goal of getting the mods -- over the goal actually have mods in hand, that's occurred last night, but both the actuals that we had with the agreement in Q2 are in place and rolled in there.
And then with the anticipation of what was going to be awarded, which was in line with our expectations, that was already baked into the forecast as we go forward.
Your next question comes from the line of Scott Mikus with Melius Research.
Very nice results, and congrats on the submarine contract. I have a couple of quick clarifications on it. Of the $76.6 billion of contract mods, how much of that goes to Newport News versus [ electric boat ] if you have a ballpark figure there? And is there a reason why it was only 9 Virginias instead of 10?
Yes. So on the Part 1 there, yes, $76.6 billion what comes to Newport News is approximately $25 billion of that and about $5.5 billion on the Columbia program. The rest of that is related with the Block VI contract award, obviously, goes on the VCS contract. And then the capital incentives that benefit both the Virginia class, the Columbia class and Newport News operations in totality, those incentives are spread over various contracts. Relative to...
Yes, the 9 ships there is material for the 10 ship bought as well, I believe. So that's not going to impact production of the class. It's more of a funding mechanism.
So there's 10 ships of material, right? And then there's 9 shipsets cost-wise for the integration and testing and delivery of the boat, right? And the 10th ship could be used for spares or could eventually be pushed up with the go line as another integrated chip?
Okay. That's helpful context. And then, Chris, you've done a lot of work increasing the outsourcing through distributed shipbuilding. With your outsourcing partners so far, how has the quality of work been? Has it been in line with expectations, better than hoped? Or maybe are there areas for improvement? Just curious how that's going.
Yes. Well, we have a long history of outsourcing in both shipyards. So we've unfortunately made mistakes in the past. We've learned from that in each shipyard. We've rolled those lessons learned into our process for outsourcing, again, in both shipyards. Now it's not perfect. We still have some issues. But all in all, in each, we've had pretty positive results. We do find issues, we have our QA and our engineering team out there right away. We have in process inspections to ensure that we execute with our outsourced partners. So it's not been perfect, and we need to continue our outsourcing, and we've been pretty successful over the last 2 years doing that, and we will continue to do additional outsourcing related to distributed shipbuilding. So it's been positive. There have been issues we've had to deal with, we jumped right on them, and we remediate the issue. But all in all, it's been very positive.
Piggy back on the back of that 2 here, as you know, our ships are follow-on ships in production, both Newport News and Ingalls provides the engineering package and the package of parts as well. So it's not first of class or first new builds. The vendors are at times doing for the first time, but we have program project management oversight, quality and engineering support. And then when they're finishing their products, it's more of a pilot range that we pilot initial construction or fabrication. And then as they're able to prove out and get good quality and their own cost and schedule, then we provide more work packages.
Maybe Brian could talk about their process and how they evaluate distributed shipbuilding partners.
Yes. As Chris said, we worked really hard to incorporate all the lessons learned from past efforts and we've worked hand-in-hand with our Navy partners down on the Gulf Coast. So it isn't a throat over-the-fence kind of mentality. We're there, as Tom said, hand-in-hand with our suppliers. We have incremental checkpoints, just like we would for ourselves, both with our inspectors and our Navy inspectors. And the fruits in the pudding, we just directed our first [ 2-gram ] blocks as we talked about in our release we just put out from our distributed shipbuilding partners and they were incorporated into the ship as expected. And so it takes staying on top of it and working hand-in-hand with the suppliers, but we're really positive about the results so far.
Your next question comes from the line of Gautam Khanna with TD Cowen.
Congrats on the submarine contracts by the way. Yes. I was curious just -- was there anything about the terms once it was finalized that surprised you or made you think the 9% to 10% eventual goal at shipbuilding is not consistent with the terms of the submarine contracts that were agreed to last night?
No, no, nothing, nothing different or special about the terms. It was a lot of work. It's a very big contract. The Navy, the EB and the Newport News team worked very hard to get it over the goal line. But it's very consistent with what we expect from a profitability standpoint. So nothing really special. Obviously, we had to incorporate kind of lessons learned for coming through COVID and the economic environment we dealt with there. So I do obviously expect it to perform better than those contracts. But I think it's very consistent with the long-term margin profile that we expect.
Okay. That's great to hear. And because we're all kind of asking the same question on what the size of the EAC was in Q2 related to it and/or will be in Q3. Is there any way you can give us some way to assess how big that was related to signing these contracts? And then also the cash impact, presumably, there are advances and the like that are in the guidance for the year. So any quantification would be helpful.
There's a lot of moving parts in that. Obviously, as I said earlier, very topically more contract value, more statement or capital commitment incentives on the contract. So -- it's early, and we normally don't provide that type of visibility into the contract right now as we go forward here.
There's always timing issues related to incentives under the contract but we've included all that within our guidance.
Maybe just to put a finer point on it, should we expect a bigger not knowing what the absolute numbers are. Should we expect a bigger adjustment favorably in Q3 versus Q2 related to the contracts being signed?
So, I'll take that. Yes. The contract itself is in very early stages. It's -- so we've got to make progress on the revenue side, see how performance plays out. These milestones and responsibility we have to obviously, to execute the contract and cost of schedule and relative to the incentives and things we have to do and evidence completion on that. So I would expect that we would just like we saw an incremental improvement here, we find our footing once we establish -- the contract has been awarded, we'll establish our baseline, we'll get that out.
And then we're off to the races. It's just managing performance every 13 weeks and making our commitments on those contracts. So I think it's aligned. The guidance kind of incorporates that. You can see after a meaningful kind of step-up in ship holding at 5.7% to 6.3%, we're telling you, 6.3% for Q4, you can do the high and low against that at now 6% to 6.5%.
And steady performance and staying on schedule. It's a piece of the portfolio at Newport News gets us to the top end. And if we were to run into some headwinds on the existing contracts that we're trying to get those completed and pushed back. There's always the possibility of some step backs in those. But we did clip off half the bottom range here. And we feel good here with just a little less than half a year ago, now standing at 6% to 6.5% for shipbuilding at year's end.
Your next question comes from the line of Doug Harned with Bernstein.
I'd like to go back to Noah's question, I was trying to understand the shipbuilding lines because this is -- I mean this is an industry you don't get a lot of surprises. So the fact that you took guidance up by a pretty large amount, $500 million quarter-over-quarter. And how much of that was due to this new award? And how much might be due to something else like change in the milestone or something like that.
Well, top line was related, and I'll let Tom talk about the award, but the top line related just confidence that we're going to execute in our programs over the balance of the year. Throughputs 12% and materials proceeding, the milestones are staying in place.
So from my perspective, that's just confidence in execution under our programs. Now obviously, we've got a large contract award and Tom, I don't think it's going to give you specific numbers in that regard because we had that in our guidance or we knew that we're going to get that under contract anyway, but Tom can comment on the top line.
It's much more, Doug, on the former here right now, it's the run rates that we're seeing both at Newport News and Ingalls. We see good inflection on hiring and in-sourcing, outsourcing at both yards and then expectation on at Ingalls that, as Chris said earlier, a little flat at the beginning of the year. But what we're seeing in throughput and capacity, in-sourcing, outsourcing, job shop labor and then just the actual numbers, as I mentioned earlier, we've seen HII have double-digit growth across the company, across 3 divisions, but specifically in shipbuilding and follow suit as well, 18%, 19.6%, 19.7% and now 15.8%, respectively, quarter-over-quarter -- year-over-year on a quarterly basis here. So there's a good fit there. We're doing what we -- we're executing. Yes. Is the question out there?
Yes, on that, Tom. So 1 of the -- I mean, 1 of the things that you've brought in has been -- some of that came out of that previous Block V awards for the last 2 ships was additional support for labor sort of higher labor wage rates. And so I guess 2 things on that. One is that is that's presumably a contributor to the near-term revenue growth when that flows through the additional labor cost flows through. Can you comment on that? How important that has been in taking these revenue numbers up, and I know you're getting supported Ingalls too, for this. So first, how important it is on the revenue side, that should be a pass-through. But the second part, how that's helping you improve your performance and your throughput.
Yes. So relative to the revenue growth, obviously, there's a timing of that. Newport News per se the go line of Q2 of last year. So in the comparison, that's already kind of baked in. The Ingalls just went over the go line in the February time frame. And meaningfully, it's just working itself through the revenue side now. So I still say organically, the growth is happening because of higher material and high labor we have more ships inflow, more people either in the yards and/or more work being outsourced. So that's what's really driving that I'm with you that as that takes hold and the comparisons year-over-year, it will be baked into higher wages, but that's less than half of the growth rate differential of what's happening right now. It's just more capacity and throughput through both yards.
Doug, to provide a little bit more detail relative to how it's helping us improve throughput with some really good data on experienced [ craftsmen ] and crafts women first-class craftsmen and women and their retention rates. And it's improving in both shipyards. And there's nothing better than having a first-class weld or ship that are electrician being retained and staying employed in rolling ship over ship. So that's what we've been looking for.
The wages and the support by the Navy on the wages on the nuclear programs has really been beneficial in that regard. And we're starting to see that as well at Ingalls some initial indicators that first-class labor is starting to stay, and that's very, very positive.
Your next question comes from the line of Scott Deutsch with Deutsche Bank.
Chris, what are these contract incentives tied to? Like what do you have to do from a performance perspective to fully earn them out?
Yes. So they're very broad, right? They're related to labor investments, capital investments, performance under the contract. I don't want to get into specifics on what they are. but each of them have specific milestones that need to be accomplished with the goal ultimately of improving performance on the shifts and making sure we meet our commitments to the Navy. So they've been very well thought out and negotiated between us, ED and the Navy. We're comfortable we'll be able to execute against them and achieve the baseline contract.
Okay. And then from an accounting perspective, why do they get recognized in margin at the time of award rather than the period of execution against those milestones?
The majority of them will be kind of recognized as on a go-forward basis here, right? And then as we booked a couple of the incentives in Q2 there, it's just the value equation there as far as what the incentive was based on. Again, we're not going to get into the details on the phone call here. But the urgency of wanting to get started on the investment is important, hiring infrastructure, throughput, long lead on capital projects, all those go into the construct of when we recognize the commitment [indiscernible] commitment that was put on contract? And then as we execute going forward, we're allowed to kind of book that.
Okay. Are there cases where you've accomplished some of the milestones before the award and that's what allows that treatment?
On a couple of the incentives as an example, there may be an advancement to get started on a capital project. It's a commitment that from an accounting perspective, we can take that. And that -- a piece of that may been booked in Q2.
Okay. And then, Tom, just to clarify, are the underlying margins at Newport News, excluding incentives improving as well? Or is this mainly incentive-driven margin improvement?
I think it's a mix. I mean, obviously, you can subtract that we told you what the cume adjustments were at Newport News, they were single digit -- positive $8 million. If you subtract that out, the running [ EAC ] without the adjustments is about consistent at 5.5%. I think the value equation here of the awards is the additional investments that go into the yard, right? Throughput capacity, capital, hiring, infrastructure, training. So I'm excited by it. We've been talking about these awards for a while here. It's good to get the full complement of both the ship boat package as well as the incentives completely on contract now going forward?
Yes, Scott, I could add to that, and I've said this previously, is the most important thing is that we transition out of those -- out of the ships we're working on now into the new contracts. This new contract is a step in the right direction. But Newport News throughput over the first part of the year has been very, very solid. And as I mentioned, in the submarine programs as well. So as they continue to make progress, make the ship deliveries reposition into the future ships, I think margin will naturally improve.
Nice results.
Your next question comes from the line of David Strauss with Wells Fargo.
This is [ Ben Tomic ] on for David. I was just wondering, could you guys give us an update on the mix of pre-COVID versus post-COVID shipbuilding revenue today? And then where you think you will be over the next couple of years?
Yes. On costs, we've set the trajectory several years ago that we got to 2027 by the end of the year, we'd have more post than pre and nothing has changed on that. So we're kind of in the markdown. The end of this year and getting into next, we'll be right at the 50-50 mark. And then by the end of the year, we'll actually have more post COVID than pre-COVID. So it's good to retire that.
Every time you hear a milestone of us either taking about putting a boat in the water and ship and taking the seat and selling it off. That's 1 pre-COVID effort that's behind us, and we're continually getting awards, whether it's the sub awards, we had DDG that was fully awarded just a couple of weeks ago. That's a new start program, contract that has been a mix of understanding the statement of work, the schedule, the overall bid cost, the material is in line with what we're seeing in the business environment, the labor and labor efficiency associated with what's in the U.S. right now is incorporated into and a much, much better balance risk and opportunity set so that we can achieve our intended and expected outcome on these post-COVID contracts.
Got it. And then how are you thinking about the for gate program with the battleship opportunities? Is there any upside to guidance there?
Yes, not yet. We're evaluating the acquisition approaches to each of those. And as we come through our plan this year, we'll incorporate those into the plan based on the latest information if we update anything, it will be in '27. I would say on the frigate we started that bill on a preliminary basis, and we expect to be put under contract for that potentially later this year, and we've done the initial started the design work for the battleship as well on a limited basis with support and cooperation with the Navy. .
Your next question comes from the line of Ron Epstein with Bank of America.
Just maybe -- 2 follow-up questions for you. On your prepared remarks, you talked about all the preparations you're doing with the workforce. Can you talk about how you're retaining labor? You mentioned you hired 3,500 shipbuilders. Did you lose any in the quarter? Kind of what was your net add? And kind of what's really worked to retaining them besides just pay? Are there things that you've changed in terms of work conditions I know there were complaints about parking or far away and having to take buses and that sort of stuff. So what have you changed in terms of the work environment and how it's retaining going?
Yes, Ron, thanks for that. I think you've been in my all hands meeting relative to the parking question, which is kind of always the first one. But rather than I take a shot at that, let me talk to a shipyard President, and he can talk about what he's doing from a labor standpoint. .
Thanks, Chris. So Ron, it's front and center in just about every discussion, what we can do to support the workforce, both the retention of the workers that we already have as well as tracking next the set of workers, both skilled and unskilled. We have done just about everything over the years, starting with massive capital investment in the [indiscernible]. We put over 1 million square feet under cover. So if you've been to Pasco in the summertime, that shade makes a tremendous amount of difference, protection from the elements when it rains, et cetera.
The collective bargaining agreement was a huge win. As we said earlier, we saw immediate impacts on attrition with the CBA being signed and we're starting to see a real benefit on hiring as well, particularly with rehires, people who know who we are and people that we know are good shipbuilders. And so that's been a positive as well.
We have done busting both inside and outside the shipyard. We do a lot of work on employee engagement really putting a lot of focus on putting the right leaders in the right place because it all starts with Performant and frontline supervisor. So pretty much every day, that's at the front of what we think about as a leadership team trying to make the conditions optimal for increasing throughput and delivering these ships.
Got you. Got you. Got you. And then maybe, Chris, just 1 follow-on. In your prepared remarks, you talked about the opportunities with, call it, unmanned surface vehicles maybe unmanned underwater vehicles. How much of the naval fleet do you see that actually becoming if you look at the overall budget in the Navy and given the price.
Ron, you're cutting out, sorry, .
Yes, here. Sorry about that. Can you hear me now? .
That's okay. Yes, yes, yes, we can.
Great. So when you look at unmanned systems, service vehicles and underwater, and you kind of compare that to a lot of the big stuff you make, the blue water stuff, ultimately, how much of the Navy is that really -- I mean how big an opportunity is that really relative to a lot of the other stuff you do.
Yes. So it's from a revenue standpoint right now, it's pretty modest. But we know it's going to become more of the Navy fleet because they just can do missions, excess missions and expand the fleet size such that they can do things that not only not the large capital ships can't do and take the place of large capital ships in some of the missions. So I don't really want to comment on how large it's going to be, but I'll tell you 1 thing. It's the fastest-growing business unit we have.
We have some -- have had some very positive results on our line fish program, where we just re-upped the next option year. We're competing for the MUSC program. I've talked about that, but it's a competitive program. So I'd rather not go into too much details. The international and domestic pipeline is strong. And so we're going to pursue those.
So -- and we have really world-class autonomy. So it's a good business unit. It's a growing business unit. The profitability should be solid because it's firm fixed price contracts. So we think we're very competitive, and we're just going to -- we're going to continue to invest in it and watch it grow. Now is it going to be a $1 billion balance sheet? No. But we think it's going to grow. We think there's significant opportunity, and we think it's going to be a greater part of the fleet.
Your next question comes from the line of Emily Deutschman with Wolfe Research.
Quick question on carriers. So it looks -- so it looks like at Newport News, there was a mix of positive incentives and adjustments as well as on the opposite end lower performance on the program. Are you able to speak so more about the dynamics within carriers and which ships are reflected in that? And then secondarily, these public comments to keep coming out about redesigning the carrier, is that something that's just sort of hanging in to there and doesn't have [indiscernible] yet? Or is that something that's in discussions now?
Yes, sure. Thanks, Emily. I appreciate the question. Yes. So on carriers, we did say that in the remarks there. On the incentive side, I mentioned earlier on the award that we've talked about, there's some capital projects that just benefit the facility as a whole. So they were put on various contracts, and there was an assistance there on that front. On the performance side, as they work to with 80 and 81, we talked to you about getting that machinery equipment last year and we decked over the Q3, Q4 time frame. And as we just work ourselves through not getting that ship back into the cadence of the build cycle of what's left to go, we're continually evaluating performance and what the revised plan, the unique plan as we put 80 back, trying to kind of get it back into the rhythm of the construction there, what that effect and means to the EAC there. So all that was rolled into the performance of it, and there was both puts and takes on the carrier front. Chris will answer.
Yes, I'll take the second one, Emily. Yes, there's always discussions or comments about potential new technology implementation on aircraft carriers and redesign. We'll work with the Navy in whatever is chosen. And if there's a change -- there's a decision to make a change, we'll work with them to ensure that we mitigate any impact as much as we can and reset the cost and schedule to make sure the aircraft carrier is successful. So nothing as yet. We've received no direction on any change, but if it is, we'll make sure that we work closely with the Navy.
Great. And then 1 quick follow-up. So with the high operating tempo with operation at [ Viptera ] now and the follow-on [ Kinetic ] operations, the naval fleet is working over time to say the least. Are you all seeing lead to more scope for maintenance and overhaul demand, and that's for both the nuclear side and the surface side? Or is it still kind of too early to tell in the process?
I think it's too early to tell. And we've got a lot of new construction work. So there could potentially be more service and support work out there. But I think we're focused on new construction right now. .
Your next question comes from the line of Seth Seifman with JPMorgan.
Just 1 this morning, but with regard to the cash flow, we'll see the strong Q4. I think it was and some relation to the contract signing there. We saw Q2 of last year, I think, contract signing, driving some really significant cash flow. And those have been the really big periods of cash flow generation over these 2 years, '25 and '26. As we go forward and if there aren't major contract signings, how do we think about the potential to convert earnings into cash.
Yes. So you are right. If you look back at Q2 of last year with the awards that assisted it, I wouldn't say it's the only piece that's driving that. Right now, what we found in this Q2 over the last Q2 is, unlike last year, we're working capital improved, and we did get the awards last year for FY '24. The meaningful awards here in Q3 with the boats themselves and working capital actually kind of backed up, which it usually does in the first half of the year. We've seen that go from about 4% at the end of last year to 8% in Q1 and now we're sitting around just under 11%. That's natural as we work ourselves through.
We sprint at the end of last year and then the working capital kind of swings back. I see that improving as we get into Q3, Q4. The ramp in the top line that we've talked about, assist cash flow, the improvement, obviously, on the bottom line, it provides assistance there. And then as we continue to make our milestones, we had the milestone chart here hasn't really talked about on this call, but we give you religiously the milestone chart in Q2 and Q4.
We reiterated that all milestones are in play right now. So there's a couple of significant milestones and deliveries as well as in my remarks, I mentioned there's a tax credit that anticipate to kind of get back. We have agreement with the IRS for that's working itself through the system, and that's at the very end of this year. So that meaningfully contributes as well. But I mean all that conspires the performance, the awards, top line growth, bottom line growth, tax credit, and then a couple of dollars on the incentives that we've talked about has us feeling good and reiterating $500 million, $600 million, $100 million in Q3 and then a very robust $1 billion Q4 cash collection quarter.
Okay. Great. And then moving forward, if there wasn't -- if there's not a large contract in '27 on the order of what we've seen, does that have any impact on cash conversion and how we think about cash going forward?
No, it doesn't. As I say, I would not hang our hat on because of these awards, award every year has to come through here. I mean, you're running a plus $10 billion operations here, and cash follows margin. I know if you look back historically, maybe 1 year's higher or lower, what we expect the cash conversion of 1.0. We've had the same payment terms with the Navy. It's -- now as we make progress, you get cost in a piece of fee and as you make more progress those percentages change here. But it's tried and true. It works. It's equitable for both sides as we make progress, we were able to collect costs and fee on that. So I don't see that changing. .
And as I say, it's just us kind of working through. I think as COVID as we make progress on these COVID ships the milestone right, we show 5 awards in the next -- this year and next year. So a lot of ships going through integration and test. Two steps for 1 step back on passing tests, spare parts, things of that nature. So just create some headwinds a little bit there, but seeing what we did for the first half of the year, the work scope that's in front of us and the plans that we have I feel good about the guide right now between 500 and 600. Plans are in place. We know the 50-or-so milestones and steps that have to happen for us to achieve our perspective and guidance.
Yes. I would focus on the deliveries. Those 5 deliveries over the next 12 months are really important.
I am not showing any further questions at this time. I would now like to hand the call back over to Mr. Kastner for any closing remarks.
Okay. Thank you for your continued interest. I look forward to seeing many of you over the next quarter. Have a good afternoon. .
That concludes today's call.
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Huntington Ingalls Industries — Q2 2026 Earnings Call
Huntington Ingalls Industries — Q2 2026 Earnings Call
Starkes operatives Momentum: Umsatz und EPS steigen, Shipbuilding‑Guidance angehoben, Submarine‑Verträge schaffen Nachfrage‑Stabilität.
📊 Quartal auf einen Blick
- Umsatz: $3,4 Mrd. (+10,9% YoY)
- EPS: $5,27 (vs. $3,86 Vorjahr)
- Shipbuilding: $2,7 Mrd. (+16% YoY); viertes Quartal in Folge zweistelliges Wachstum
- Mission Tech: $760 Mio.; EBITDA‑Margin >10% (Division berichtete >10% EBITDA‑Margin)
- Aufträge: $6,7 Mrd. Vertragsabschlüsse im Quartal
🎯 Was das Management sagt
- Throughput: Fokus auf Produktionssteigerung; YTD +12% vs. 2025, Ziel für 2026: +15%
- Distributed Build: Ausbau von Outsourcing/Partnerschaften (+30% verteilte Fertigung geplant) zur Kapazitätserhöhung
- Produkt‑Fokus: Submarine‑Definitierungen und Carrier‑Meilensteine geben Planbarkeit; autonome Systeme (USV/UUV) als wachsender Geschäftsbereich
🔭 Ausblick & Guidance
- Shipbuilding 2026: $10,2–$10,4 Mrd.; operative Marge 6,0–6,5% (oberes Ende angehoben)
- Mission Tech 2026: Umsatz $3,0–$3,2 Mrd.; Segmentmarge ≈5%
- Q3 Erwartung: Shipbuilding ≈ $2,6 Mrd.; Shipbuilding‑Marge ~6,3%; Mission Tech ~ $760 Mio. mit ~4% Margen (inkl. Investitionen)
- Cash & Steuern: Q3 Free Cash Flow ≈ $100 Mio.; Full‑Year FCF $500–600 Mio. (starkes Q4 erwartet); effektiver Steuersatz 2026 ~17% (Q3 konservativ 21%)
❓ Fragen der Analysten
- Margenpfad: Analysten haken nach Quartalsverteilung; Management verweist auf bereits teilweise eingebuchte Anreize und Meilenstein‑Timing
- Submarine‑Impact: Wie viel der Modifikationen/EAC/Anreize in Q2 vs. Q3 erfasst wurden bleibt nur grob quantifiziert; Management sagt Teile sind in Guidance enthalten, detaillierte Zahlen nicht offengelegt
- Outsourcing & Personal: Qualität der Zulieferarbeit und Retention/Hiring (3.500 Neueinstellungen YTD) sind zentrale Themen; Management berichtet von Verbesserungen, aber noch Optimierungsbedarf
⚡ Bottom Line
HII zeigt klare operative Verbesserung: höhere Umsätze, gesteigerte Shipbuilding‑Marge und Vertragsabschlüsse (inkl. U‑Boot‑Pakete) stärken die mittelfristige Sicht. Cash wird jedoch quartalsweise ungleichmäßig fließen (großer Beitrag in Q4 erwartet); Aktie bleibt stark an Auslieferungs‑/Meilenstein‑Execution und staatlicher Budgetierung gekoppelt.
Huntington Ingalls Industries — Bernstein 42nd Annual Strategic Decisions Conference
1. Question Answer
Okay. Good morning. I'm Doug Harned, Bernstein's Aerospace and Defense Analyst, and I'm thrilled to have with us today, Chris Kastner, Chairman and CEO of HII. We're going to go right into Q&A here, I think.
You promoted me. So not the Chairman, but I am the President and CEO.
I didn't know that.
That's okay. We've always had a split governance structure at HII.
Okay.
That's okay.
That's the first question.
That's the first question. Yes, you got that right.
So anyway, let's just start. Maybe you can just give us an overview of what you're seeing now at HII, what some of the opportunities you have, some of the challenges?
Sure. So first, safe harbor rules apply here. So I'm not going to break any news. But at HII right now, we're very focused on throughput. We have 5 deliveries really over the next 12 months across a number of different programs. We have LPD that 30s got to deliver. We have LPD -- excuse me, DDG 129 is going to deliver, CVN 79, SSN 800, LHA 8, all those deliveries are going to happen in the next 12 months.
We're very focused on delivering the fleet for the U.S. Navy. We have set internal milestones and actually external milestones or goals around throughput. We achieved 14% last year. We expect to achieve 15% this year. We're doing that by growing our labor force and distributed shipbuilding. Both of those have to work in order to execute on our programs, but we're very, very focused on throughput and meeting the demand, really historic demands of the U.S. Navy.
On that, right now, we're looking at a budget. The Trump administration's proposal is $1.5 trillion. We don't know exactly where that's going to go. But maybe as a starting point, given that -- and there's a lot of money for shipbuilding in there. But as a starting point, maybe -- can you help us understand how you're viewing that process, given that there's uncertainty in the whole way this is going to move through...
Right , right. Well, it's definitely complicated. As my old boss used to say, Mike Petters, who you know very well, look, this is the first step of the process. We're in the initial stages of this process. Very complicated when you think about reconciliation, the supplemental, maybe 2 reconciliations. The great news is that our ships are in the base budget. So all of our 6% revenue growth, the midterm revenue growth that we're talking about, that is all protected in the base budget. So if that happens and as that moves through the process, we're going to be fine.
So if we -- I mean because one of the worries we've had is that if there is no reconciliation pass and we go to October 1, then we're back at basically down $155 billion on a CR.
Right, right, it could be. I don't see a threat to our programs. The vast majority of them are under contract already. We need to get Block VI in Columbia done. But -- and DDGs will happen as well. I'm comfortable with those. We already have the [ ante ] bundle squared away down with Ingalls. We started the frigate program down at Ingalls, which is really not even included in our 6% guide. So we're in a really good place, and the budget supports it. And if the battleship happens, the nuclear battleship and frigate happen, that's upside to the guidance.
Okay. Now in this budget, there are big increases. I mean you've got increased Virginia class, Columbia Class for [ amphibs ]. Now -- right now, you've already got a huge backlog. When you move this money in, one of the struggles we've had is to figure out how to get -- it goes back to your comment on throughput. How they turn that money into real volume coming out the other side. I mean how do you think about this challenge as the funding continues to rise?
It's all about increasing your labor force to meet that demand and then doing distributed shipbuilding. Historically in shipbuilding, when things get great during the [ rating ] buildup, you pushed work out of the yards. So you identify the core work you need to keep and you push everything out. That's happening right now. We doubled our distributed shipbuilding last year. We were going to increase another 30% this year. And we're bringing on partners to help us facilitate that additional demand.
Can you elaborate on that a little bit, how you think about the distributed shipbuilding concept? This seems fairly -- 10 years ago, we wouldn't have been talking about...
We wouldn't know because we didn't need it. We had plenty of capacity in the yards and labor in the yard.
So how do you manage that today? And how do you identify sort of the next opportunity to expand on that?
Well, we've had challenges before. We've done it incorrectly, and we were punished for it on the LPD program when it originated. So we're very careful and disciplined in how we do it with the right QA and the right engineering to ensure that when the units come back, they meet our expectations, and we could just continue on building the ship.
So we go to partners. We do initial pilot programs with them. They'll build 1 or 2 units. We make sure they have sufficient capital and labor and the technical know-how to execute on it. Once they do that, we'll expand their scope and we'll grow. Now it makes sense to have some core sort of shipbuilders and [ Gulf Copper ] does that for Ingalls so they can handle a lot of the capacity, but you're going to have to go to a few in order to handle all of the work that needs to get done both at Newport News and at Ingalls.
And are these -- are these often sort of traditional players in this space? Or does this vary -- can you -- and the reason I ask is it's been -- it was such a problem through COVID, when you start to see volumes come down -- and you have very specialized suppliers in this industry. And if their volumes come down, they can be in some real financial trouble. So -- are you basically working with the same base or types of people that you've worked with before in expanding the roles? Or are you able to actually bring in a broader spectrum of...
So it's both. So it's both. We are working with established partners that we've had for a long time, where we can expand their capacity. But we're also bringing in new entrants that have steel experience because what we're doing is just the upfront part of the work, and you've been to the shipyard, it's just the initial unit work where you're creating units prior to them being outfitted.
So the capability exists, you just need to be able to do the welding that's required to get that done and have the capacity and the tooling required to get that done. So it's both. It's established players and bringing new entrants that already have experience. We're not going to bring someone that has no experience in welding structure together into the space.
But if I think back to some of the things that Mike Petters said one time. And it was sort of -- this isn't the greatest example, but when you did the UPI acquisition. But one of his points there was that there was -- there are -- there are many -- there are industries where the type of engineering and production work that you do has similarities to others. And that was one of the arguments that there was some synergy there, but I'm thinking the other way around. And if you're thinking of capabilities, and it could be in energy and other places.
It's energy, it's commercial shipbuilding, it's oil and gas. Anyone who's built structure or fundamental simple structure, we can go to them and see if they have the bonafides to execute.
And one of the things that this administration -- when we were here last year, they had just announced the White House Office of shipbuilding. They were going to -- the President talked about bringing in Korean support, which I think you have been doing some of that. And how effective is that?
Well, so our partner is HHI, right, Honda Heavy Industries. They're very disciplined as we are and how we allocate capital and whether they're going to make an investment or not. So we're being very careful. We need to make sure that if there is a significant investment made in the shipbuilding industry, there's work on the back end. So we're still in the evaluation phase with that.
The good news is they build ships a lot like we do in the defense space. They've learned from us. We've learned from them. We've been in their shipyards. So we fully understand that they've been in ours. They've walked our panel line and really liked it. We're still looking for the right opportunity with them. But I think there is a chance that, that is successful.
Is that more in the Ingalls' side, I would think.
It's definitely Ingalls, right.
Yes. I mean it's kind of hard to...
Right. You don't bring the nuclear work there.
Okay. Then so last year, you got this -- the award for the last 2 Block V class. And in that, you've got a big boost which was funding to support labor. Can you talk through a little bit about how that all works and how that's proceeded?
Actually, very well at Newport News. We adjusted the contracts for the labor that's kind of a margin-neutral sort of adjustment that we're fortunate that the nuclear shipbuilding enterprise contributed that for us. It's been successful. Their attrition rates are better. Their labor situation is better. They met their throughput goals. They're actually ahead of their throughput goals through Q1, especially in the submarine enterprise, which is very positive. So that's it. So it's worked very well.
Yes, this is one where I was trying to fully understand it. I thought the goal here was to be able to raise wages -- wage levels. You could then attract maybe a stronger workforce through doing that. And then that would ultimately turn into higher quality, better throughput, better performance. Is that the process? Because it seems like it would be pretty early to already see results from this. I mean I...
No, you see some results in better cost performance on some of the ships. Better throughput for sure because you're attracting more labor. So it is working.
Okay. So how many -- you're always talking about the balancing hires versus attrition? How -- what does that look like at Newport News now in terms of expanding the workforce?
It's positive. There still is some attrition. It's much better than it was before, but the attrition is happening in the right place. We're keeping -- we're adding and keeping experienced shipbuilders in Newport News right now.
And then when we think about revenue, one of the things that's been difficult for us is because some of the increase in revenue in Newport News is due to the pass-through on the labor side. And so if I were to take that out at Newport News, what's your growth rate sort of ex the...
So we have -- we haven't communicated that externally, but revenue growth is a combination of labor increase throughput increase, but also material flowing through the system with just additional work. So to watch and pay attention to sales growth, you need to pay attention to all 3. And then more important than anything, you need to make your ship deliveries, right? So if I were to guide people on how to think about HII right now from a shipbuilding standpoint, is if we're getting healthier, those 5 ship deliveries happen consistent with how I'm talking about it. And they're all proceeding, but they're getting into the most difficult part, which is final test.
And so when you talk about 6% growth, which is -- I mean, I remember every earnings call, it's like with Mike and analysts would say, no, you're going to grow faster than that right now...
You would say we're flat. We're going to be flat.
[ 3% ]...
I still talk to Mike, and he has a hard time believing what we're doing, but he had a lot of confidence in us. He did a great job -- he was flat.
When he was saying 4 not too long ago...
We moved to 4 simply because we saw it. But remember that we were dealing with $12 billion budget, $12 billion to $15 billion annual budgets at the time. That's not even...
And if you want to really go back to it and put it in context, we were really worried about the Columbia class. If you recall the conversations we would have. It's Columbia class we thought would be so big that it would cloud out amphibs. But what has happened is the Columbia class is happening, and it's big. There's been inflation, so everything is more expensive, and we want more amphibs. So it just didn't happen like we expected it would. But fortunately for us, we have the capability, and we're creating the capacity to execute on all of it.
Well, when you went to the -- to say now, you're growing at 6%, which is the number we haven't really thought about before. Is that -- it goes back to this labor pass-through. I mean are you -- is that 6% kind of driven somewhat by that? Or is that a sustainable 6% rate?
It's pretty sustainable. It's pretty sustainable. It's -- and remember, we're starting on a year that already had wages included, right, fundamentally part of the year.
Q3, Q4.
Part of the year, right? So when you think about a CAGR, it's pretty sustainable. I don't want to go beyond kind of medium range guidance. But for the next 4 to 6 years, it's definitely pretty solid.
At the 6% type level?
Yes.
And then you're just -- you've just started the same type of program in Ingalls, right?
Yes.
So that's when we will see probably a step up...
Yes, I do expect it to step up as well. We see some leading indicators in the labor front with applications that it will start to grow that workforce at Ingalls, and we definitely need it to because there's a lot of work down there. We've already started work on the frigate, which is great.
And the frigates then over where you were doing NFC, right?
Exactly. Right. Yes. We have the team. A lot of the team is still in place, all the process is still in place. Design is fixed, really on the hard part of the ship. There's some topside changes that the Navy wants us to incorporate that we've agreed to that are really not a manufacturing challenge. So we think we'll do a great job on those first 2 frigates.
And so back in the important news. You had -- I think you were up -- throughput was up 14%, I think, last year. I think you're talking about 15% this year. So how -- what does that mean? I'm trying to figure out -- and you and I have talked about this a million times. I'm trying to translate that into this movement from kind of 1.4 Virginia class. You're getting to that 2 per year goal collective. There's a lot of...
There's a lot of fixation on the 2, [ 2.3 ] per year. It's a tough metric to get to, and it's not one I really like very much because we've reset the Block V boats to an adjusted schedule based on when we think the supply chain is going to show up. And so -- and I know the Navy talks about the 2030 -- beginning the 2030s.
I focus on ship deliveries. I focus on ship deliveries. We got 2 year last year, 2 years, the year before as a submarine enterprise. We're out of the first Columbia class boat. We've delivered all of our equipment for the first Columbia class boat. The second Columbia class is much more efficient. We did -- and it's proceeding in a much more efficient basis than the first one. So we're making progress there.
So I focus on ship deliveries. And throughput is simply earned hours. It's not cost. It's not the cost to earn the hour because sometimes we have distributed shipbuilding, which is at a premium. Over time is at a premium. So it's actually earned hours, productive hours that you have to get done.
Okay. So it's really the -- and it's a labor. It's -- is it...
It's labor -- it's labor plus -- plus the value of distributed shipbuilding, which comes in as material, but it's really there's an equivalent labor category there.
Okay. I see. Okay. So is this -- like the 15% type number, is this something that we should expect to continue, your 15% this year, but is that something -- a year from now, you'd be looking at a similar goal?
There will be a new number. I don't know if it's going to be 15%. We have to finish our plans this year and talk about how we want to guide for next year. But the amount of work and earned work will continue to increase.
Okay. Because I mean at one time, you were looking for 20% last year. And 15% sounds pretty good to me.
It's pretty high goal, pretty high goal. Maybe I pushed them a little bit too hard, right?
Yes.
The good news is that the submarine program is -- has got some traction right now, which is very positive. Really for national security, not just our financials. It's a top priority, Columbia class, top priority and then Virginia class right after that, especially with the Virginia payload modules which are part of Block V. So having the submarine enterprise getting some cadence is really positive.
But the payload modules, I mean those aren't yours, right? So...
We don't build a module, but we do integrate it.
You do the integration...
On the ships that we deliver.
So once you deliver -- okay, I see. So there's extra value for you, even though the module itself suffered.
Well the work -- there's additional work for us to do the integration, yes.
Okay. So Block VI, you hear that today or...
Yes, it's just...
Very close, right?
Very, very close. We essentially are going through the approval process in the government to get those contracts done. I fully expect them to be done before the end of Q2. It's just a very large contract. It's a complicated contract. They need to go through the approval processes. And I get updated every day on it. But I still expect it to get done.
I mean I know that so much of the challenge here, I'm going to talk with Tom a lot before about this, is getting past all of those sort of COVID time boats and getting -- where you never got, I think, properly compensated for the inflation. And you're not alone, everybody else is...
Everybody else thinks mine are very large, and they last a long time.
Yes, yours are bigger than anybody else is.
Yes, 2 largest contracts we signed as a corporation are the 80 and 81 contract in Block V. What you're signed in 2019.
Yes. So -- and you didn't get much help with that, right?
I will say the Navy has been very fair on looking for ways to make investments to make us more productive, especially in the nuclear enterprise. So no, we didn't get large equitable adjustments to those contracts, but they have been fair. They contributed wages for the submarine program. They have contributed MIB and SIB funding, so -- and given us incentives. So there has been an effort by the Navy and the administration to support submarines and Newport News.
And that also -- I mean that extends down into the supply chain, right?
It does. It does. Where you identify areas where there's problems -- and in the MIB money and the SIB money go into increasing their capacity, give them technical help, additional capital to be invested.
Because this is one of the things that I've struggled with because the shipbuilding -- shipbuilding supply chain is so complex. I mean I...
And it's complex.
I don't know -- well, it's funny. Last year, I remember [ Phoebe ] made this comment to you guys, you think a bombers hard. You have no idea how hard a nuclear submarine is. And so in trying to understand that, what does the government and the Navy need to do to really facilitate getting your whole supply chain working? They're helping you with labor. I mean are there further steps that you're looking toward what the Navy can execute on?
Yes. Well, yes, first things first is award the contract on time. So we're on long lead for Block VI already. We're on long lead and have continuous build authority on Colombia, which means we're going on Colombia. We just don't have the final negotiated contract yet. So the most important thing is to order the material on time.
Second is identify the critical suppliers that are at risk and ensure that they don't bite you at the end, right? And we've done that. They've expanded their casting and forging suppliers, which was a real bottleneck for us, and we actually buy a lot from the U.K. right now. So it's happening. Is it happening fast enough? You can always go faster, right? But first things first, order stuff on time. Don't miss that and then expect a miracle to happen and a supplier to show up 12 months early, so we can make a production schedule.
When you look at developing this throughput metric and setting a 15% goal, what are the bottlenecks that you're thinking through? In other words, what determines whether that's a 10%, 15% or 20% goal? How do you...
Well, we set our plan every year based upon where every ship is and the EAC for every ship, the supplier schedules, the labor demand, how all the ships interact with each other, where they flow through the yard. And that is a complicated process. We've already started it for next year for our plan, and then you establish your throughput metric based on all those inputs coming together to say what the schedules will be and how productive the people be when the suppliers are coming in, when they'll make the deliveries.
The worst thing in the world in a shipyard is to have a crew show up at a work site and not have the material, right? And then it's like, okay, what's your second job foreman, right? Are you ready? Can you put those people to work or they have to sit there all day, which is just a bad place to be.
And I remember, you and I saw that many years ago down in Ingalls.
We did. We did. We did. And that's a horrible place to be. So we're working really hard on that in both shipyards to make sure that everything shows up at the right time and the work packages are actually workable.
Yes. So Block VI, can you describe -- as you look at Block VI, how this can be a much more attractive structure for you guys than IV and V were obviously negotiated at different time?
Well, you just said it. First things first is it's a completely different economic environment, right? The inflation is different. The supply chain risk is different. The production schedules are different based on where the workforce is. The amount of work in your yard is different. So we had to take all that into consideration in establishing that contract. And we think that ultimately, it will be a fair contract where we have a real chance to be successful and make our margin target. It's not overly good or overly bad. It's kind of right down the middle to reflect our current situation.
I think back to the late '70s, early '80s and how those shipyards performed then when they had a different economic environment, a lot of demand, a lot of inflation, a fragile supply chain. They did pretty well because they reset their contracts to deal with that. Those contracts got diluted over a long time of no growth and no inflation. So the protective clauses kind of fell away because you didn't really need them and you lost them at the negotiation table or they weren't part of a competitive procurement. Well, now they're back. So it's kind of cyclical. It just hit us at a tough time because we had some very large contracts negotiated in 2019.
Yes, yes. So -- if you think about these new ones coming in, as I try to understand -- actually, let me back up a second and go to the carriers because you did have an unfavorable adjustment in Q1. So you've had a couple of these on the CDNs. Can you talk about how that program is just going overall in the different...
Sure. So 78 had an amazing deployment, by the way. And when the Navy releases the data on their sortie rate, you're going to see the [ e-malls ] and AAG and the elevators performed amazingly. It's an amazing ship, and the data that comes out of there will be very, very positive.
79 is going to have their second trials here in the summer, and it's essentially done. Sailors are operating that ship. We'll get the final delivery, if not this year, beginning of next year.
80, as you know, is significantly impacted by the reduction gear and the turbine generators in the bottom of the ship. We've received all of that now. We've done deck over. We've initiated our continued erection of the ship on 80. We'll be 75% erected at the end of the year. They're really making hay on 80, and then 81 will lay the kill this year and we'll be right behind it.
So unfortunately, that's a lot of bad performance behind you and a lot of inefficiency behind you. If you go into Newport News right now, you're going to see units everywhere. You're going to see units in a parking lot outside staged because we're out of space because we're just building them, getting them ready to be put in the dock, which is positive, right? You'd like to just build them and put them on to the ship and erect them, but you just -- we couldn't because we had that space.
So they're making good progress. 81 is making good progress, challenging what's been behind us, and it's -- we had a minor adjustment. We're going to have to deal with that over the next couple of years as we as we clean up that production schedule on 80. It's just -- it's -- we have to be careful of that. And just if we have some inefficiencies coming through a quarter, we'll have to deal with them.
Well, -- this -- the carry problem is -- like no more complicated program probably even miss.
Our COH is more complicated so...
Well, okay. And then -- but that's relevant here too, right? So now you've got the [ for ] that's operating and performing well. What now that it's in service, does that create any sustainment revenue for you when this first-in-class is in service and -- I don't know if that's material particularly.
It's probably not material. There is some sustainment revenue and engineering and planning revenue that happens at Newport News in support of aircraft carriers, but it's not significantly material, no.
When you go from 78, 79, to 80, are each of these -- are they very different because there's obviously evolution over time because it just -- it makes -- when you get into some of the issues on 80 and -- how do those crop up? I mean are there advances that are being pushed through as you...
Major systems are the same, right? Radar, the same; e-mall, same; AG, same; all the aircraft system is the same. You're going to have potential analysis done for 82 to increase [ lethality ], and they may look to backfit that into 81 or 80 if they can catch it. But when I talk about minor adjustments from time to time on 80 and 81, it's going to be around inefficiencies related to how we did the construction at the beginning of the program. And are we going to -- what were our assumptions relative to how we're going to complete that or continue to build the ship? And did we meet that or not? Because you really don't know -- you really don't know until you -- because we were so out of sequence on 80. You have to continue to work through that program.
Well, so when you put this together, we've got this holy grail of 9% to 10% type shipbuilding margins. When you look at Newport News, Block VI should come in, be much more attractive. You've got to work through some of these the CVN issues. Columbia class, my assumption that may be at this stage, a little bit below. But how do you think about the margins and the ultimate path to get to that kind of number?
So we'll incrementally improve next year. I'm comfortable with our guidance this year. It's going to continue to improve. It's all -- it's really predicated upon getting those ship deliveries done and transitioning those people into the higher-margin ships. So I think both shipyards should be at 9% to 10% and maybe even north of that, if they're executing well based on these new contracts. But again, 9% to 10% is how we forecast a healthy shipyard margin. But both of them -- and it's all transitioning out of the ships that are lower margin into the higher ships. And I can't stress enough the value you get from going through a ship delivery. We're going to have people that are going through ship deliveries for the first time, and we've got 5 coming.
So when that happens, the learning just happened. You wouldn't believe the DDGs at Ingalls right now, just stacked up, and you've been to Ingalls before. But you can see it, you can be on LHA 8 right now and look across the yard and see just stacks of DDG 51s. And if you can finish your milestone and just walk next door and do the exact same job with the exact same team, you're going to be more efficient. And we have [ lapped ] that probably for 10 years.
And so -- so when you're saying Newport News, you could get to that. I mean, totally makes sense to get to that 9% to 10%. Is that -- does that come at a time when you've at least -- your work, I mean, because you still got -- you got a lot of -- Block VI work is just going to start. So do we need to wait until Block VI becomes a majority of the work to get there or...
I can't really predict it at this point. I mean, I've obviously got plans on when I think it's going to happen, but there's a lot of variables that go into that. It's -- you don't have to deliver everything in Newport News, both aircraft carriers and all Block V boats before you get there, right? That happens out in the earlier mid-2030s. I fully expect to get there before that.
Yes. And I mean as I think about this, I mean, the margin is always this combination of some double-digit margins on fixed-price production programs. Then you've always got development in earlier stage, and it blends out to 9 to 10, which we saw back at a long time ago at Newport News. But then you could get -- as we saw is -- Mike always tried to dissuade me from -- double-digit margins is what you got...
You were the one that came out -- you were the first -- your price target when we came out at 40. You were the one that believed, right? You had the highest price target and you were proven true.
I've been there, right? I saw [ Irwin ]. I saw the...
Right, right. So did I.
Yes, I know. I'm sure you did, a lot. No. But the thing that was that was so important, and it's what I kind of -- looking for here is that you could be down there and see everything is moving towards mature ships. People know how to build them. They're biased toward fixed-price mature ships, and then you could suddenly find yourself in double-digit margins, as much as Mike wanted to say don't assume that. But you did. And I would think at Newport News, if you look at the mix there, and if you can get -- forgetting the time, but if you're getting into sort of maturity on production on Virginia class, you move through a little way on Colombia. CVN, I have a very hard time understanding how that works.
But the RCOH is cost-type contract, where there's a significant amount of growth work that happens on that ship, we should perform well on our COHs.
Yes. Okay. Can you perform above what -- can you get margins above...
I'm not going to comment specifically on what their margin rates are, but it's a cost type ship where you make an assumption about how much growth work you're going to have. You have the changes you get consideration for that. So you should do well in RCOHs.
So it's helpful to get you to your target basically, yes?
Yes.
Okay. So going over to Ingalls, this is one where we're just talking about -- which it looks like a pretty mature set of programs today.
They are. They really are.
And what holds you back from getting that kind of 10%-plus level margin there?
It's simply -- it's the same story. It's less impactful down at Ingalls. There's less, I guess, less beta down at Ingalls because they've had a track record of executing on those programs fairly well, and they don't have a new ship program in there either.
So they negotiated the last DDG contract and a couple of LPDs prior to COVID, right? So 2 ago, right? So they have to come to those and they need to get into the new DDGs, they needed to get into the amphib bundle. And when they do that and when they execute on those deliveries, it's going to step back up.
And that's a big volume of work, right?
It's a lot of work. The DDG work is a lot of work.
And so assuming that those CDG contracts are success -- are good for you guys now. Then I mean, this has all the potential, I would think, to revisit those days of a bias toward fixed price mature contracts at higher volume.
Well, they are. And these are all fixed price incentive contracts with fair margins that we have a chance to be successful at.
In the [ FFX ], can you just sort of dimension how large that will be in terms of your work on there?
The first 2 -- they're about $800 million to $1 billion program price -- from a price standpoint. The first 2 are sole sourced to us, and we think we're going to do a great job building those. It's a little murky when you think about the acquisition profile. Subsequent to that, I think there'll be more than one builder. That's what the Navy has said. And so that acquisition profile, we're not really comfortable with yet. But we think if we do the first 2 very well, we have a great chance to build a lot of frigates.
And it's a ship we know how to build. We got -- it was very predictable, a really good team. It's not a lot of content in the shipyard. It's got a very predictable build schedule. We're very comfortable that we know what that ship cost and how long it takes to build it.
And it seemed like this was just a natural for you after NSC. I mean...
We thought -- yes, I'm not going to comment on the award of that contract to the company. But very rarely do you get someone say, "Can you help us and build a new ship, right? It's usually a very competitive process. And we're fortunate we had a ship design that was very buildable.
Yes. So the Trump class destroyer.
Battleship. Trump class battleship.
I can't call it destroyer?
Well, it's a battleship. It's a nuclear battleship actually. So it's been identified as a nuclear battleship. Newport News is engaging with the Navy on how that's going to proceed and how that design is going to proceed and how they would build that in Newport News because they're really the only place that can build it.
So it has to be there.
It has to be there based on the size -- and because it's nuclear. It has to be in Newport News.
So what's the trajectory for this?
Well, so it's just starting, right? We're in the initial stages of discussions with the Navy on the plans for that. You saw it in the 30-year the shipbuilding plan and the quantity. But we need to get to the design, understand what the design is and engage in that with the Navy. And then think about how we integrate it into the shipyard if we were to build it there, when we build it there. So it's just in the initial stages, it's not in our guidance. But I think it's positive and it's broadly supported in the government.
Okay. Yes. I mean I've heard a lot of controversial comments about it, but...
I listened to comments by the President, the CNO, the second half, all of those are very positive on the nuclear battleship. So that's where I'm going with. That's who I'm going with.
Okay. But what I would ask is do you invest ahead of this? Or do you need to know more?
I don't need to make significant investment ahead of this.
Okay. Yes. All right.
And if I do, we'll be very disciplined in how we do it.
Okay. Yes. So on Mission Technologies, -- and we've discussed this in the past. So maybe you can just help us understand a little more about what holds that whole business together? Because they are different...
Well think about the acquisitions that pull together Mission Technologies. There's really 3 major acquisitions. Hydroid, which is really the largest unmanned vehicle provider -- on an underwater vehicle provider in the world, made that acquisition. SIS, which is -- was a very good unmanned surface provider, SIS in Virginia Beach. And then Alliant, which is technology. And Alliant has always been an R&D house. A lot of cost-type contracts, electronic warfare, [ C4ISR ], training, really good cyber capability for cyber com. And that pulled it all together.
So we had nuclear into that mix, which is really bullish on nuclear right now, a lot of opportunity, a lot of projects that we're pursuing and competing on that, I think I have a good chance to win in those and generate some revenue in commercial nuclear actually where we actually build part of the structure. So that's very interesting.
But unmanned is probably the most interesting thing right now. When you look at the budget and what happened in reconciliation, what happened in this year's budget, I think we are nearing that inflection point in unmanned, where it's going to be more tangible part of the Navy fleet. They're going to buy more product, and they're going to get it out there and see how it works.
We're fortunate we made the investments ahead of this, not only in the companies that can build a product. But our Odyssey Autonomy suite is a combination of the SIS autonomy suite and the Hydroid autonomy suite. We combine them into Odyssey. Open architecture like the Navy Ones built to Navy standards. We've got world-class partners like ShieldAI that we can plug right into it to compete. And there are a lot of opportunities that we're competing on in the unmanned space. Obviously, we've got a large contract for small underwater vehicles, but there's both international and domestic competitions in the unmanned surface space.
So we think we made the right investments. We think we're in a great place to compete. Now it's low barriers to entry, a lot of competitors. But I put us up against anyone, and I actually think because of our background and we understand how manned unmanned team has to happen, and we understand the [ minotaur ] technology, which is on PH relative to mission management, but the battlefield management of the assets on the battlefield. We understand that as well. The frigate is going to have a module in it to control unmanned boats. There's U.K. initiatives around the armor program or their frigate, which [ Babcock ] builds that we have a relationship with, it's going to team with potentially team with the [ Romulus ] family vehicle that we provide to expand their presence in their reach in the North Sea.
So we're all over this in support of the Navy's edge fleet. And so I think there's real opportunity there, and we're entering this kind of -- what we talk about as an inflection point potentially in demand in support of the Navy.
Yes, it's it is also a complicated market to sort through because there are so many different types of plays here.
Different acquisition approaches, different investment approaches as well because you have to build these things and demonstrate them before they buy them, right? And now fortunately, they don't -- they're not $1 billion ship, right? These are low dollar -- not low dollar value, but less dollar value of $20 million to $40 million sort of products when you think about the 150-foot surface vehicles. But that's an investment they're going to have to do, but it's worth it when you think about how the Navy is evolving with their hedge fleet.
I mean -- so the session before was [ Anduril ]. And they're in this market, too. And they'll -- I'm sure as you've heard, there are others like [ Saronic ], and that they'll all talk about their speed to market, speed of development. And there's also -- I would call it a favorable view inside the Pentagon today of new entrants, whether or not they are -- or not, they can do the job. There's a real openness to that. Like how do you look at your positions here and that -- and against these new entrants, but also [ L3 Harris ], a lot of people.
Yes, low barriers to entry. And as you recall, I was on [ Global Hawk North ] -- so we thought we were going to dominate the UAV space, right? But it was just too expensive in the entrance. GA came in with their product and did very well. And there's a lot of other UAVs that came into the market, did niche sort of missions. I think this will develop in a similar fashion, but there are large quantities of surface vehicles that are going to be bought.
So the beauty of our position is we've had a bit of a head start, right, especially in the unmanned undersea, and we have some very large contracts. We've been working very hard on our autonomy for a long time. And we built it knowing that we needed to plug in new commercial tech into it, and we're doing that right now.
The other issue is you get to demonstrate it. It's not marketing with out on the water. So we will -- first of all, I welcome [ Saronic, Anduril ], all the commercial tech, bringing young smart people in the industry as an American, I like. That's positive. But I need to be given a fair chance to win, which -- and so when you're going to a demonstration, there's nothing more fair than that. There's a clear criteria on how you need to execute. If you execute, then you can win. So that's -- all I want is a chance to compete, and I think I have that.
And are there certain segments within the unmanned undersea that are particularly well suited for you?
Well, unmanned undersea, I think all of it is well suited for us because we've been doing it for so long. And surface is a little different, right? And it's a pretty open market right now. Very small boats. I'm not really sure if that's suited for us, although we did just deliver some relatively small boats to the marines a couple of months ago that are working great with the obviously, software on it. But again, we're going to evaluate each opportunity. I think you have to choose because they're going to settle up on a size, I think, -- and you want to be swimming towards that right size.
And if we look -- it's a hot area, but if we look -- the revenue dollars are relatively small today.
But with high quantities, you can start to add up.
And that's what I was going to get at. Well, in 5 years, how large could you see this business being?
Yes. I don't necessarily want to project that, but I do think there's interesting models not only in how you sell them, but how you monetize it, right, with the software. So if you are able to sell these and sell the software potentially independently and get recurring revenue streams on the software, and we think we have a very good software in this space. That's interesting.
So yes, there are small dollar values for each asset, and I don't really want to project how big it's going to get, although I think if you just look at the budget, you're going to see it's going to get bigger, and we'll get a piece of that. But I do think there's just great, great opportunity, both top line and bottom line.
Okay. So like overall, you've guided to free cash flow of $500 million to $600 million this year, what things could -- should we be looking for to see could you be the high end of that? What will determine why you've come out in that range?
Make the ship deliveries. We need to get Block VI in Colombia done, which will contribute to free cash flow in the year. But we need to make our ship deliveries. They're not all 5 of them in this year, revenue at 800 done this year, and we need 30 -- LPD 30 done this year. So we need to make our throughput commitment because our billing clauses are based on earning the hours, deliver our ships, get Block VI in Colombia done, and then we'll be fine.
Okay. And just curious, there have been some concepts in the past that we haven't seen it actually come to fruition. I'm just -- it's like LXR was going to be like the next -- the next LPD, but LPDs just keep on going.
Well, it's a great ship. A lot of room on that ship, a lot of ability to upgrade it based on technology. I think they'll always evaluate different alternatives, but they think the LPD, the large deck and the LHAs and the new concept for the marine, I think it's got a lot of legs and it's done a very good job. So why mess with something that's doing very well for you.
Yes. Okay. Well, Chris, it's great to see you here, but we're out of time.
Okay. Great. Well, thanks, Doug.
Thanks a lot.
Yes, appreciate it. Thank you.
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Huntington Ingalls Industries — Bernstein 42nd Annual Strategic Decisions Conference
HII betont Auslieferungs‑ und Durchsatzfokus: 5 Schiffs‑Lieferungen, 15% Throughput‑Ziel, Block VI kurz vor Vertragsabschluss.
🎯 Kernbotschaft
- Fokus: Management zielt auf steigenden Durchsatz (productive earned hours) und pünktliche Schiffs‑Lieferungen als Hebel für Umsatz, Margen und Cashflow.
- Priorität: Ausbau der Arbeitskräfte und "distributed shipbuilding" (Auftragsarbeit an Partnern) zur Bewältigung historisch hoher Navy‑Nachfrage.
- Timing: Block VI-Verträge erwartet vor Ende Q2; Frigate‑Programm mit ersten zwei Losen sole‑sourced, Nuklear‑Battleship in frühen Planungsphasen.
🚀 Strategische Highlights
- Throughput: 14% in Vorjahr, Ziel 15% dieses Jahr; operativer Hebel für Lieferungen und Abrechnung.
- Distributed Shipbuilding: Verdoppelung letztes Jahr, +30% geplant; Pilotprojekte mit etablierten und neuen Stahl/Schweiß‑Partnern.
- Mission Technologies: Unmanned/Autonomy‑Plattform ("Odyssey") gestärkt durch Hydroid, SIS, Alliant — Fokus auf Unterwasser‑ und Oberflächen‑UAVs sowie Software‑Umsatzmodelle.
🆕 Neue Informationen
- Konkretes Timing: Block VI (Columbia/Block VI) in Behörde‑Freigabe; CEO erwartet Vertragsabschluss vor Ende Q2.
- Frigate‑Größe: Erste zwei FFG‑Aufträge je ~ $0,8–1,0 Mrd. und sole‑sourced; Folgeaufträge offen für Wettbewerb.
- Lieferliste: Fünf erwartete Auslieferungen binnen 12 Monaten (u.a. DDG‑129, CVN‑79, SSN‑800, LHA‑8, LPD‑30‑Serie) als kurzfristiger Operativtreiber.
❓ Fragen der Analysten
- Distributed Risk: Kritische Nachfrage zum Partner‑Onboarding; Management betont disziplinierte Pilotphasen, QA und Kapitalkriterien.
- Arbeitskräfte & Löhne: Nachfrage nach Sustainment der Wage‑Initiativen; Company sieht positive Effekte bei Rekrutierung und sinkender Attrition, führt zu besserer Durchsatz‑Performance.
- Programm‑Risiken: Analysten hoben Supply‑Chain‑Timing, Reduziergetriebe/Turbinen‑Probleme bei CVN‑80 und Abhängigkeit von Vertragsabschlüssen (Block VI) als Kurzfrist‑Risiken hervor.
⚡ Bottom Line
- Implikation: Aktienperformance hängt direkt von Auslieferungen, Durchsatzsteigerung und rechtzeitigen Vertragsabschlüssen ab; Guidance für Umsatzwachstum ~6% mittelfristig bleibt intakt.
- Upside/Risiko: Upside durch zusätzliche Bundesmittel, Frigate‑Volumen und erfolgreiche Skalierung des distributed shipbuilding; Risiko liegt in Lieferkettenengpässen, technischen Issues (z.B. CVN‑80) und Verzögerungen bei Block VI.
Huntington Ingalls Industries — Q1 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2026 HII Earnings Conference Call.
[Operator Instructions]
Please be advised that today's conference is being recorded. [Operator Instructions]. I would now like to hand the call over to Christie Thomas, Vice President of Investor Relations. Mrs. Thomas, you may begin.
Thank you, operator, and good morning, everyone. Welcome to the HII First Quarter 2026 Conference Call. Matters discussed on today's call that constitute forward-looking statements, including our estimates regarding the company's outlook, involve risks and uncertainties and reflect the company's judgment based on information available at the time of this call. These risks and uncertainties may cause our actual results to differ materially. Additional information regarding these factors is contained in today's press release and the company's SEC filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations page of our website at ir.hii.com. On the call today are Chris Kastner, President and Chief Executive Officer; Kari Wilkinson, Executive Vice President and President of Newport News Shipbuilding; and Tom Stiehle, Executive Vice President and Chief Financial Officer. Now I'll turn the call over to Chris.
Thanks, Christie. Good morning, everyone. Before I begin today, I'd like to thank the men and women in the U.S. military and our shipbuilders for supporting our nation and our allies every day. Our ships, submarines and defense technology solutions are foundational to United States military operations around the globe, providing superior capabilities in a high-threat geopolitical environment. At HII, we are focused on delivering for mission success, and we are committed to providing quality platforms for the war fighter. Today, I'll start by discussing our results, the Ingalls and Mission Technologies division highlights and provide an update on our operational initiatives. I've asked Kari Wilkinson to join me to discuss Newport news updates, and then Tom will provide more details on our financial performance and outlook.
Now turning to our results. We reported first quarter sales of $3.1 billion and diluted earnings per share of $3.79. Another strong quarter of shipbuilding sales growth at 18% year-over-year was driven by our shipbuilding division's focus on increasing throughput in our shipyards and supported by broader efforts underway to revitalize and rebuild the U.S. maritime industrial base. Customer demand for our products and services remain strong. First quarter contract awards were $4 billion.
At Ingalls, in the first quarter, we achieved stern release on LPD 31 Pittsburgh, laid the [indiscernible] for LPD 32 Philadelphia, loaded JP 5 Fuel on LHA 8 Bugganville and continued to make test progress on LPD 30 Harrisburg, which we expect to deliver later this year. We also completed builders trials for DDG 1000 USA ZoomWault and achieved crew [indiscernible]. On the Detroit program, after delivering DDG 128 Ted Stevens at the end of last year, we loaded fuel on DDG 129 Jeremi Denton, launched DDG 131 George M. Neil and achieved stern release on DDG 133 Sam [indiscernible]. We also loaded main machinery on DDG 135 [indiscernible] Cochrane and received the first 2 of 32 units in yard from our distributed shipbuilding partners on DDG 137 John F. Lehman.
Moving to Mission Technologies. We had another quarter of strong sales of $748 million. We have a robust opportunity pipeline, and we were awarded a position on the $25 billion ceiling Advanced Technology Support Program, Microelectronics multi-award contract and the $151 billion ceiling Missile Defense Agency Shield multi-award contract. We also secured a new $500 million contract to expand our Cyber Defense and Data mesh solutions for the Department of Ward. In support of the Navy's HEG strategy and the government's approaches to procuring new technology programs, emphasizing corporate investment in product development and demonstration prior to formal contract award, we are increasing our investments in our autonomous solutions portfolio of products. We have multiple autonomous vessels in production, and we are actively extending the capabilities of Odyssey, our autonomy software in strategic partnership with leading AI companies.
We see significant award opportunities in this group as evidenced by material increases in the FY '26 funding and FY '27 budget documents and international growth pipeline. Our expertise in unmanned technology and autonomy, coupled with strong technology partnerships and comprehensive understanding of manned, unmanned interfaces provides a strategic advantage that we can capitalize on to substantially grow this business.
Moving on to an update on our operational initiatives. As for the first operational initiative, enhancing shipbuilding throughput, we are on plan through Q1 and continue to expect to achieve our goal of approximately 15% throughput improvement for the full year in 2026. We hired over 1,600 shipbuilders in the first quarter. We also graduated nearly 200 apprentices from our apprentice schools this year, and our apprentice schools are now at full enrollment. I'm confident that as our workforce continues to stabilize, our workforce will become more proficient. Also, we continue to make progress on our second operational initiative to rapidly grow our trusted industrial base network. Leveraging our distributed shipbuilding strategy, we are on track to grow our outsourcing hours year-over-year by 30%, and we will continue to identify capacity expansion opportunities to meet customer program demand requirements.
The third operational initiative of securing new contract awards is on track, and we are making good progress on the VCS Block VI and the next Columbia contract with awards expected in the second quarter.
Shifting to activities in Washington. Congress finalized defense appropriations for fiscal year 2026 in February. In addition to the support for our programs in last year's reconciliation bill, we saw continued bipartisan support for our programs reflected in the 2026 Consolidated Appropriations Act, including funding for CVN 80 and 81, along with advanced procurement for CVN-82, continued funding for CVN 74 RCOH, funding for the Virginia-class and Columbia-class submarine programs, advanced procurement for the DDG 51 program and funding for long-lead materials for the new frigate program. In early April, the President submitted a top-level fiscal year 2027 budget request to Congress. The proposed budget reflects continued investment in our shipbuilding programs, funding 2 amphibious ships, LPD 34 and LHA 10, 1 DDG 51 surface combatant, 2 Block VI Virginia-class submarines, one Columbia-class submarine and the first FFX frigate. The budget request continues funding Ford-class nuclear aircraft carriers and aircraft carrier refueling programs provides initial advanced procurement funding for the leadership of the Trump Glass battleship program, the USS defiant. Beyond shipbuilding, the fiscal year 2027 request reflects increased investments in capability enablers, including autonomous systems that align well with our advanced technology capabilities of our Mission Technologies division.
Now to wrap up my remarks. In summary, we had a solid first quarter and remain focused on meeting our commitments to our customers and creating value for all our stakeholders. And now I'll turn the call over to Kari for her remarks on Newport News.
Thank you, Chris, and good morning, everyone. We've been busy at Newport News since the start of the year, beginning with our visit from the Secretary of War for the launch of his arsenal of Freedom Tour. Over the course of the day, the Secretary spoke directly to sellers and shipbuilders about the importance of what they do and how what we build directly supports the mission. Appropriately within just a few weeks of that engagement, we marked 140 years of service to our nation. In program milestones, we exited a very active and successful fourth quarter in 2025 and hit the ground running by successfully completing builders sea trials of CVN-79 John F. Kennedy. We remain focused on preparing for CVN-79 acceptance trials later this year. CVN-80 Enterprise is now coming together at pace and is over 50% erected in dry dock 12 and and CVN-81 units continue to move through steel fabrication and outfitting in support of the [indiscernible] later this year.
In our submarine programs, we completed sea trials and redelivery of SSN 796 USS New Jersey after her post-shakedown availability. We remain laser-focused on getting the last of our Block IV boats SSN 800 Arkansas to sea and delivering later this year. As Chris mentioned, we've made good progress on the framework for both Virginia Class Block VI and Columbia build 2 and anticipate contract awards in the second quarter, demonstrating our continued commitment to increased submarine delivery cadence. We also continue to invest in our future. Following our January 2025 acquisition of a fully operational facility with an established and talented team of shipbuilders in Charleston, South Carolina, we added nearly 0.5 million earned hours of progress to our programs in our first year operating as Newport News shipbuilding Charleston operations.
In 2026, our plan is to double Charleston throughput, including structural fabrication and more fully outfitted units that are ready for integration when they arrive at Newport News. We will also continue our capital investments to grow the site substantially over the next several years. And we will continue to transform our shipyard. In 2026, we are again making hundreds of millions of dollars of capital investment at Newport News, including significant investment in our manufacturing centers of excellence to support the submarine throughput our nation needs, finishing a multipurpose carrier refueling and overhaul work center and making peer updates to support carrier and activation.
Our investments in people will continue as well. Our shipbuilders continue to gain in proficiency, confidence and tenacity. In March, we congratulated 128 apprentice graduates as they walked across the stage and stepped into their leadership roles and our trades. We continue to partner with local high schools and community colleges as well as Hampton Roads manufacturing pipeline programs to expand our workforce, and we have already reached our strategic goal of onboarding more than 50% of our new shipbuilders through these more sustainable methods.
We also continue to graduate our Forman from the leadership programs that our operations leaders have reimagined. This program reboot focuses on the critical skills identified through our process excellence organization and gives our frontline leaders the hard and soft skills they need to do the important work we are asking them to do.
With our 2025 and 2026 successes in hiring, reducing attrition and our continued efforts to enable and strengthen our supply chain partners, I am confident we will continue to see improvement in Newport News outcomes. Now I'll hand the call over to Tom for some remarks on our financial results. Tom?
Thanks, Kari, and good morning. Let me start by briefly discussing our first quarter results, and then I'll provide some color on our expectations for the remainder of the year. For more detail, please refer to the earnings release issued this morning and posted to our website. Beginning with our consolidated results on Slide 5 of the presentation, our first quarter revenues of approximately $3.1 billion increased 13.4% compared to the same period last year. The higher revenue was attributable to year-over-year growth at all 3 divisions with particularly strong growth at both shipyards. Shipbuilding revenue was up 17.6% compared to the first quarter of 2025. Ingall's revenues were $725 million, an increased 13.8% compared to the first quarter of 2025, driven primarily by higher volume and surface combatants. Newport News revenues of $1.7 billion increased by 19.3% compared to the first quarter of 2025 driven by higher volumes across aircraft carriers, submarines and naval nuclear support services. Together, shipbuilding revenue was $2.4 billion, modestly ahead of the $2.3 billion guidance we have provided for the quarter.
Mission Technologies revenues of $748 million increased by 1.8% compared to the first quarter of 2025, driven by higher volume in all domain operations due to the C5ISR growth unmanned systems due to the growth in [indiscernible] fish autonomous UUV program and Global Security, partially offset by lower volumes in warfare systems.
Moving on to Slide 6. Segment operating income of $172 million and segment operating margin of 5.6% in the first quarter of 2026 compared to $171 million and 6.3% in the first quarter of 2025. At Ingalls, segment operating income was $49 million and operating margin was 6.8% compared to $46 million and 7.2% in the first quarter of last year. The increase in segment operating income was driven by the higher volumes and surface combatants that I noted earlier, partially offset by the lower performance in amphibious assault chips. The first quarter net cumulative adjustment at Ingalls was a negative $3 million, and none of the adjustments were individually significant. At Newport News, segment operating income was $88 million, and operating margin was 5.3% compared to $85 million and 6.1% in the first quarter of 2025.
The increase in segment operating income was primarily driven by the higher volumes described earlier, partially offset by contract adjustments and incentives in the first quarter of 2025 from the Virginia-class submarine program as well as lower performance in aircraft carrier construction. Recall that Newport News results in the first quarter of 2025 had the benefit of meaningful contract incentives related to the award of a contract modification for the construction of 2 additional Block V Virginia class submarines. For the first quarter of 2026, Newport News Shipbuilding's net cumulative adjustment was negative $9 million. None of the adjustments in the quarter were individually significant.
Mission Technologies segment operating income was $35 million, and operating margin was 4.7% compared to $40 million and 5.4% in the first quarter of 2025. The decrease in segment operating income was primarily due to the timing of equity income from nuclear and environmental joint ventures, partially offset by higher performance in warfare systems. For the first quarter of 2026, Mission Technologies' net cumulative adjustment was a positive $13 million. None of the adjustments in the quarter were individually significant. Consolidated operating income for the quarter was $155 million, and operating margin was 5% compared to $161 million and 5.9% in the same period last year. The decrease in operating income was driven by higher noncurrent state income taxes, partially offset by the slightly more favorable segment operating income that I've just reviewed.
Net earnings in the quarter were $149 million, and diluted earnings per share were $3.79 with both consistent with the results from the same period last year. The effective tax rate in the first quarter was 20.7%. We provided the tax guidance for 2026 out of approximately 17% and still believe that is correct. The credit responsible for that lower tax rate is expected to be processed later this year. I will provide our view on the appropriate tax rate for the second quarter in a moment.
Turning to Slide 7. Cash used in operations was $390 million in the quarter. Net capital expenditures were $71 million or 2.3% of revenues. Free cash flow in the quarter was negative $461 million. Free cash flow results in the quarter were better than the guidance we had provided largely due to stronger collections in the quarter as well as some disbursements moving out of the period. During the quarter, we did not repurchase any shares. We did pay a cash dividend of $1.38 per share of $54 million in aggregate.
Turning to liquidity and the balance sheet. We ended the quarter with a cash balance of $216 million and liquidity of approximately $1.9 billion.
Moving on to our outlook on Slide 8. We are reaffirming all of the guidance elements that we provided on our last quarter's call for both 2026 and our medium-term outlook. I'll note that we continue to see the new battleship in frigate programs as meaningful upside opportunities to our medium-term outlook, that we will need additional details before we can include those in our guidance outlook. As I noted on our last call, our guidance for 2026 is predicated on achieving the shipbuilding throughput improvements that we've outlined as well as reaching agreement on the next Virginia and Columbia class submarine contracts in the near term.
Moving on to the second quarter look ahead outlined on Slide 8, we expect shipbuilding revenue of approximately $2.4 billion and shipbuilding operating margins between 5.7% and 6%. For Mission Technologies, we expect revenue of approximately $750 million and operating margin of approximately 4%, inclusive of the strategic investments that we expect to make in our unmanned capability and production capacity. We expect free cash flow in the second quarter to be between negative $100 million and positive $100 million. There are a number of factors, including the timing of the upcoming submarine contract award regular working capital movement and CapEx timing that create variability in Q2.
Regarding the effective tax rate, we believe it's prudent to use a tax rate of 21% for the second quarter though we still believe 17% is appropriate for 2026 with an expected research and development tax credit coming later this year. To close, it was a good quarter as we continue to make steady progress and execute against our 2026 operational initiatives. With that, I'll turn the call back over to Christie to manage the Q&A.
Thanks, Tom. [Operator Instructions] Operator, I will turn it over to you to manage the Q&A.
[Operator Instructions]
Your first question comes from the line of Scott Mikus with Melius Research.
2. Question Answer
You called out the battleship and Frigate as being potential drivers of upside to the medium-term shipbuilding revenue growth outlook? What we saw in the 2027 budget request, there's a lot of funding in there for auxiliary and support ships. Just wondering how you're thinking about that opportunity set when it comes to Ingalls and could that put upward pressure on the medium-term growth outlook?
Yes. The auxiliary ships when you take into consideration their current workload at Ingalls as well as we'd have to evaluate those kind of on a case-by-case basis. But there's plenty of work at Ingalls when you look at their baseline business, battleship, frigate, which we know we're going to build battleship. We're just at the beginning of with the design effort with the Navy. But I don't necessarily anticipate competing for those at this point, but we're going to evaluate it based on how they unfold and how the acquisition strategies unfold.
Got it. And then a quick one for Tom. If I look at the 2Q outlook in the 1Q results, it implies that you need to generate about $1 billion of free cash flow in the second half of this year. Just curious if you could talk about the level of visibility to achieving that? And what are some of the moving parts that could cause that to come in a little bit below or maybe even a little bit higher than that?
Yes, I appreciate the question, Scott. Yes. So we're in the normal cycle here where we use cash at the beginning of the year. We beat guidance for Q1 as we were out in front by about $100 million. As I mentioned in my remarks, it was some disbursements kind of moved out to the right as well as we did better in collections than we anticipated. The Q2 guidance is about neutral, plus or minus 100, and that will kind of leave us at the midpoint about $460 million negative, which means we've got to pick up about $1 billion in the back half of the year. That's in line with our play book and consistent with what we guided at the beginning of the year. That will come about through making progress through the back half of the year. We have some major milestones and deliveries as well. We have some tax credits and collections in R&D that will come about, which will provide a tailwind to our performance as well on free cash flow.
As far as opportunity set, I mean, obviously, there's opportunities and risks around that, but we're reaffirming the guide for the end of the year at $500 million to $600 million, and we'll keep you informed as we move forward here. We usually don't want to get ahead of ourselves and we guide relatively stable to conservative. There are opportunities that -- both for improvement or if there's a drag on performance here. But we still feel good about the range that we have as we start to tackle the back half of the year.
Your next question comes from the line of Scott Deuschle with Deutsche Bank.
Tom, does the 2Q guide include any margin benefit at Newport News from the expected contract awards that Kari mentioned.
Yes. So in Chris' remarks, we're expecting and working closely to finalize and execute that contract mod for those subs. There's opportunity sets around those for performance and incentives both in margin and cash collections. And that's just going to depend on the timing as far as when that -- if and when it hits in Q2 and then how we push that through the system, both in modification, margin and cash. I would tell you that we have that kind of weighted, we factor these things. And it's anticipated, as I said at the beginning of the year to happen in the first half of the year. It is a factor in the Q2 guide that we gave here but it's at a factor weight right now. So I'm comfortable with where we are making meaningful good progress with our customer on this front, and I anticipate that will work itself through the system in Q2 and the back half of the year.
And this is Chris. I might add that operationally, it's important to get that under contract, so we can continue to make progress on the submarines. So that is just as large a factor as the margin and cash guide for the quarter as we need to stay on schedule, need to stay in sequence on the submarine program.
Okay. And then Chris, can you explain what is driving the additional delays for LHA 8, 9 and 10 that the Navy justification book show? And then do you still feel confident that it will be a nice margin step-up on the post-COVID ships LHA 9 and 10, despite these additional delays?
Yes, I'm very confident in the post-COVID ship ability to improve margin. What you found on LHA 8 was just some issues in the test program as we're working through it. We have some new systems on that ship, having some challenges. We have seen over the last couple of weeks a bit of a ramp in the test rate. So that's positive. I wouldn't get overly concerned about the J. books scheduled date issues. That's kind of contextual and how the Navy communicates to Congress. We evaluate our EACs every quarter and we take into consideration a schedule risk that we may have. So I'm real confident in the [indiscernible] subsequent to LHA-8, and I have great expectations for their performance.
Your next question comes from the line of David Strauss with Wells Fargo.
Just a follow on to that -- to Scott's question. The Ingalls margin performance, I think this is the lowest we've seen in quite some time there. So Chris, if you could just dig in there in terms of exactly what's driven the margin that's much lower and kind of the outlook from here for Ingall's margin?
Sure. It was really what I would consider a pacing quarter for Ingalls, making good progress on the DDGs. As I said, we did have some risk we had to put into the LHA 8 EAC for the progress in approaching their delivery and risk related to their delivery. So we had to take an adjustment there. But I think Ingalls is making pretty good progress. It's what I consider, as I said, a pacing quarter. DDGs are showing some improvement. Milestones are in place and holding. LPD 30 making really good progress. DDG-129, making progress should you get to see this year. So yes, I've got a lot of confidence in Ingalls team. It's pretty stable there. We just had to take a minor adjustment through on LHA8.
Okay. And in terms of the shipbuilding revenue came through the year based on the guide you gave for Q2, it doesn't look like you're forecasting much in the way of kind of sequential second half versus first half shipbuilding revenue growth typically, we see a fair amount of growth in the second half in terms of just absolute revenue. If you could just talk about kind of the profile for the year.
Yes. It's Tom here. I'll take that one. And I'm comfortable with what we're seeing in shipbuild. It's a third quarter in a row where it's double-digit returns for 2025, over '24 was a 9.7% growth in shipbuilding. And as I said, from Q3, Q4 and Q1, again, we see both yards overachieving our guide of 6% kind of going forward here. So I think it's fairly linear. We at Newport News, their growth was about 2/3 in labor and 1/3 in material and Ingalls, it was the other way around, about 1/3 in labor and 2/3 in material. So we see what we strategically trying to do here is get more throughput and capacity, increase the revenue volume here, in-sourcing, outsourcing hiring, additional overtime, additional progress here. So I think it will be linear as we work through the year. And as we increase the guidance from 4% to 6% last year, we said we'd take a look at it. I want to see a little bit more run rate for a couple of more quarters here. But the backlog has increased to $54 billion. So the work is the demand, what we see already in the FY '27, the draft dock looks like there's even more appetite for additional ships. So I would anticipate a consistent, steady incremental ramp as we go forward here from quarter-to-quarter in ship building.
Your next question comes from the line of John Godyn with Citi.
This is Jeremy Jason on for John Godyn. I kind of wanted to ask about last quarter you.
I'm sorry, I didn't get that. You may have cut off, Jeremy.
I was just going to -- sorry, I thought I heard that was cut out. Last quarter, you guys provided a nice layout for some major milestones for 2026 and 2027. So I was kind of wondering if you could provide an update on that chart. And if you have sort of any indication of when those could hit beyond 2Q?
Sure. Sure. So of the '26 milestones, obviously, we delivered 128 with the sea trials on 1000. We did launch DDG131 and we're on track for delivery of LPD 30. That will be the back half of the year. Newport News, acceptance of 79 will still happen is on schedule. Lake [indiscernible] of 81 should happen this year. We already did redeliver SSN 796 and delivery of SSN 800 is towards the back half of the year as well. So timing of these, especially the significant ones are towards the back half of the year and '27 is all on schedule.
Your next question comes from the line of Seth Seifman with JPMorgan.
Just wanted to -- just wanted to ask on the carrier. When you talked about some of the performance on the carrier in the quarter and it comes on top of the year ago quarter, where I think there were some challenges on performance there as well. So what do you think it will take to kind of gain confidence in the estimates on the carrier and have the profitability outlook there kind of stabilized?
Yes. Thanks, Seth. I'll start here, and then I'll kick it over to Kari. But I -- we did have a minor adjustment in the quarter just to deal with some schedule challenges that we have getting it back into sequence. But I want to kick it over to Kari to talk about some of the things we're working on, on the aircraft here.
Yes. So it's good to hear your voice. So as Chris mentioned, we have been on previous calls talking about some of that missing equipment [indiscernible] in the ship and having that equipment delivered now and being on pace to erect out the ship is really going to help us from a performance perspective. Those delays are costly, as you're familiar. And so I'll give you an example. So the team has been really focused on structural completion with those components in place. And so over the quarter, we did 3 super lifts over the course of just 10 days. That's the kind of pace that I was referring to in my initial remarks.
We said another last night. So what that does for us is it really enables the completion of distributed systems. And so the team is getting after that in a more meaningful way and getting the ship integrated. So coming through those delays, as Chris mentioned, being out of sequence and working ourselves back into a more reasonable sequence is a really important part of that strategy, and the team is really working hard to execute on that strategy.
Excellent. That's helpful. And then maybe to turn to the crude side of the business. You talked about some incremental investments there. What's the timeline when you think about when you might see the types of awards to get production going in that area of the business in a way that would kind of stand out to us on the outside.
Yes. So I don't think it's really immediate. If you look at the budget in '26 and '27, you see significant increases in the unmanned and autonomous system budgets. We think we're well positioned to deal with that. Obviously, we have large capital ships. We've made significant investments in unmanned already. We have our unmanned undersea business. It's very mature. We have our new Romulus family of systems. And then we have Odyssey with really premier technology providers teamed with their Odyssey software. All that mingled together with our man ships means we're kind of uniquely qualified to take advantage of that business. And then you lay over the top of that on [indiscernible] where we're the prime developer of [indiscernible] for the U.S. Navy, which is really the common operating environment and visibility for Navy platforms. We think we're uniquely qualified to take advantage of it. Now do I think it's immediate? No, I think there are immediate opportunities that we're competing for, both domestically and internationally. I think it will start to ramp. I'm not sure it will be material this year, but it will over the next couple of years, you'll see material growth in the unmanned business for HII.
Your next question comes from the line of Gautam Khanna with TD Cowen.
I was wondering if you could just describe whether the fit up delivery schedules aligned with what you're expecting as of a quarter ago. So were there any surprises? You got the question on LHA just in general, were there any delivery time lines that were inconsistent with your internal thinking expressed in the '27 pivot?
Not necessarily. I have high confidence in 30 being delivered this year. I think that's into next year. So I think it will happen this year. But as I said previously, I think it's contextual. I think it's just a different communication tool. And we're evaluating these things every quarter. So just off the top of my head, 30 is the only one -- LPD-30 is the only 1 that I think we should do a little bit better than, but beyond that, I'd have to do some research on that issue.
Okay. And I know you guys pushed through some wage increases at the Ingalls shipyard. I was wondering if you've seen any notable improvements in attrition since then, any changes really?
Gautam, that's an interesting question. We did adjust Newport News wages last year, and it took a while. It took a while for the additional applications to go through the system where we were able to accelerate hiring, and we're seeing meaningful improvements in attrition and really the right level of attrition, the right people from an attrition standpoint at Newport News. I think you're going to see the same issue at Ingalls. We did adjust wages at a very positive labor agreement put in place there. We do see some increase in applications, but it's going to take a while to run through the system. We do have better attrition or improved retention actually within both shipyards. But I don't think you're going to see meaningful improvement in Ingalls for a bit. It takes a couple of quarters for that to work through the system.
Your next question comes from the line of Ron Epstein with Bank of America.
You guys talked about increasing outsourcing. I think I remember you talked about maybe increasing 25%, 30% in 2026. How is that going? How is the South Carolina facility ramp progressing? And can you discuss at all the MOA with Hyundai, how is that evolving? And is that going to impact capacity?
Sure. I'll start, and then I'll kick it over to Kari to talk about Charleston. But yes, we do anticipate 30% increase in outsourcing in 2026 over increases that we had in 2025. We continue to expand our distributed shipbuilding network. Charleston is doing well. As I said, I kick that over to Kari. But from a Hyundai standpoint, we still have -- we're still engaging in discussions with them and evaluating potential. We don't see them in the network right now. for this year that could provide upside if we're able to jointly invest in some operating manufacturing footprint. So that would be upside. But we still think there's some very positive, we could get some very positive results from the Hyundai relationship, not only in manufacturing but also in efficiencies, in how we build ships. So I want to kick it over to Kari to talk about Charleston for a second.
So yes, Charleston is tracking to plan. So last year, we spent a lot of time coming up on plan with respect to structural fabrication and the team there did a fantastic job meeting the commitments that they made at the beginning of the year to go from closing in January on our facility to producing almost 0.5 million man hours over the course of 1 year was pretty phenomenal. So I'm really proud of what the team did there. This year tracking to the commitment to increase throughput there and moving into outfitting more meaningfully.
So starting with structure, moving into outfitting, really allows us to start ramping that up in an even more meaningful way. I mentioned in my remarks, we'll do some additional capital investments to continue that growth trajectory, but really pleased with what that team is doing. And that's obviously, a core, we are also working with other distributed shipbuilding partners that have been in our network and those muscles are strengthening as well, getting back to the ebb and flow of what naturally happens in our industry, and we're certainly in a place where we're able to stretch and grow there, and that is tracking pretty well from my estimation.
Great. And then maybe just one quick one. Any update on the [ Romulus USDs ] and the Odyssey autonomy stack. Any production contracts visible that you could discuss or hint at for 2025?
Well, I hate to talk about ongoing competitions, but the obvious one right in front of us is the MUSV program and then some armor concepts over in the U.K. that could be interesting. We're talking about manned unmanned teaming. We're uniquely qualified to do that, but we'll compete for -- really, we have a breadth of product set that we can compete for a number of opportunities in the space. But the one right in front of us is the MUSV program.
Your next question comes from the line of Noah Poponak with Goldman Sachs.
Last quarter, when you provided the initial 2026 outlook. I think we were all a little surprised at a low growth rate in shipbuilding revenue given what happened in the second half of last year and the funding environment and everything going on with shipbuilding. You just logged another high growth rate and outperformed 1Q. So I guess in reiterating the full year, it actually now you would need shipbuilding revenue down year-over-year for the rest of the year to do the midpoint of the guide. Is that possible? I mean that would imply end of last year, beginning of this year was just a kind of a onetime bump in ship loading growth. It seems like what's happening in the industry is much more long term and structural than that.
No, it's Tom here. I'll take that one. And no, I think the math is a little bit off on that. As I mentioned earlier, we've seen some good growth 3 quarters in a row. Obviously, there's a comparison that we did from the previous year there, both for what we've seen in in-sourcing, outsourcing high revenues. I talked earlier about the material and the labor that's growing. I think the guide is on the conservative side, we don't want to get ahead of ourselves and where we think we can land here. But we won't see a contraction in revenue in the back half of the year. I think there's a strong opportunity set for us to exceed that. And we're holding the guide right now as we want to see us kind of burn through the existing work that we have on contract, monetize the backlog that we have and see the new awards that come on board. But I think operationally, going forward in my remarks earlier that I expect incremental quarterly growth in shipbuilding still holds.
Okay. Tom, if we were able to see your internal estimate for the mix of pre-COVID versus post-COVID ships, each of the remaining years through the end of the decade, if we were looking at that right now and then right next to it, we had the version you had of that from a year ago, do those look significantly different? Has there been a lot of movement. It's the pre-pandemic contractual roll off sliding out taking longer? Or would they look pretty similar?
They look on top of each other right now. We're on plan and on the guide that we've given. We kind of laid out a couple of years ago that would be in 2027, where we would swing over from pre-COVID to post COVID, and we're right on track on that. We'll finish off 2027 with more post-COVID work than pre-COVID work. And with a perspective on our backlog, it's about 50-50 right now, what we put on contacts before these subs that are coming on contract. So again, that will continue to grow as the subs are awarded CVN, RCOH 75, advanced procurement for CVN 82. The new awards will continue -- from a backlog perspective, we'll see more of that, too. But we're on pace as we watch -- as we retire out the pre-COVID work. 2027 is a significant year we'll see more revenue on post than pre. And there's been really no material change since we've provided that pathway following.
Okay. And is it possible to provide any more color on the sticking points in the -- in getting to the finish line on the next batch of nuclear subcontracts, it's been several months now versus the original timing forecast. And obviously, we know where the demand is, you're performing the long lead. That just remains a little surprising to see if you can help us better understand what points in the contract are holding it up?
Yes. No, I just think it's a large contract that needs significant review and approval and it's complicated, and we're just going through the approval process. I don't want to comment on any specific negotiation points. It's just a -- it's a significant, very important contract that we all need to get right.
Your next question comes from the line of Myles Walton with Wolfe Research.
I was wondering if you could comment on the reports about the Navy revisiting the carrier design and what, if any, impact that might have on ongoing work and/or disruption?
Yes. So this is Chris. I'll start, and then I'll kick it over to Kari, but I'm not worried about the reviews of the aircraft carrier. Those happen from time to time. It's usually at the end of those, it's found that it's an amazingly capable platform, and it's required, and we can see all the great work it's doing over and its engagement in Iran right now. So I'm not worried about it. I think long lead for 82 will happen this year, and we'll continue on on the aircraft carrier program. But let me kick it over to Kari.
Yes, Myles. The only thing I would add to that is that it's pretty routine for us to evaluate new capabilities as systems progress in order to incorporate those capabilities on all of the classes of ships in both yards that we build. So pretty confident where we are, and we're going to support whatever the Navy needs. So as we do evaluations on any given system, we're able to incorporate those over time pretty routinely. So I'm pretty comfortable with where we find ourselves.
Okay. And then maybe one for Tom -- sorry, maybe one for Chris, actually back to you. The workforce size, and I asked this kind of frequently, but I'm going to ask it a different way. Should we expect the workforce size to start to grow in line with the sales growth or at least a trend in line with the sales growth of the whole company on a go-forward basis. You've had roughly the same size for the last 20% increase in sales, but I imagine that probably is going to have to start increasing? Or is the outsourcing initiative enough to carry the load.
Not entirely. I think you will see increase in labor. Obviously, you need to adjust for taking into consideration you have contractors that come in to do work as well that won't be on your role. So outsourcing is going to play a significant part of it, but you should see labor start to trend as well.
I'm not showing any further questions at this time. I would now like to hand the call back over to Mr. Kastner for any closing remarks.
Thank you for joining the call today. I look forward to updating you throughout the year as we continue to make progress on our operational initiatives and deliver on our commitments. Thank you.
That does conclude today's conference call. You may now disconnect.
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Huntington Ingalls Industries — Q1 2026 Earnings Call
Huntington Ingalls Industries — Q1 2026 Earnings Call
HII bestätigt Jahres-Guidance, zeigt starkes Q1 (Umsatz $3,1 Mrd., EPS $3,79) — kurzfristig Cash-Belastung, mittelfristig Upside durch U‑Boot- und Autonomieaufträge.
📊 Quartal auf einen Blick
- Umsatz: $3,1 Mrd. (+13,4% YoY)
- EPS: $3,79 (konstant YoY)
- Shipbuilding: $2,4 Mrd., +17,6% YoY; leicht über Q1‑Guidance $2,3 Mrd.
- Mission Tech: $748 Mio. (+1,8% YoY)
- Free Cash Flow: -$461 Mio.; Kasse $216 Mio., Liquidität ≈ $1,9 Mrd.; Auftragsbestand $54 Mrd.
🎯 Was das Management sagt
- Durchsatz: Ziel für 2026: ≈15% höhere Shipyard‑Throughput; 1.600 Neueinstellungen + Auszubildende voll belegt.
- Distributed Build: Ausbau der ausgelagerten Fertigung, Outsourcing‑Stunden sollen YoY um ~30% steigen; Charleston‑Werk soll Durchsatz verdoppeln.
- Technologie: Erhöhte Investitionen in unbemannte Systeme/Autonomie (Odyssey‑Software) und Positionen auf großen Mehrjahresrahmen (Microelectronics, MDA Shield).
🔭 Ausblick & Guidance
- Bestätigung: Management bekräftigt vollständige 2026‑Guidance und mittelfristige Zielpfade, bei Upside durch neue Programme (z.B. Battleship/Frigate).
- Q2‑Leitlinie: Shipbuilding ≈ $2,4 Mrd. (OpMargin 5,7–6,0%), Mission Tech ≈ $750 Mio. (OpMargin ≈4%), FCF Q2: -$100M bis +$100M.
- Steuern/Risiko: Q2‑Steuersatz pragmatisch 21%, Ziel 17% für 2026 nach erwartetem R&D‑Credit; Hauptrisiken: Timing des Submarine‑Vertrags und Durchsatz‑Annahmen.
❓ Fragen der Analysten
- U‑Boot‑Verträge: Anleger fragen nach Verzögerungen beim nächsten Virginia/Columbia‑Mod; Management nennt komplexe Prüfprozesse, Timing unklar, aber erwartet Abschluss in H1/H2.
- Carrier/LHA: Diskussionen zu Testproblemen und Auslieferungs‑Sequenz (LHA‑8) — Management erwartet Margensteigerung bei post‑COVID‑Schiffen, sieht kurzfristige Test‑ und Integrationsthemen.
- Cash‑Visibility: Analysten hinterfragen, wie HII ~ $1 Mrd. FCF in H2 erzeugen will; Management verweist auf Meilensteine, Sammlungen, Steuergutschriften und Vertragsmodifikationen als Treiber.
⚡ Bottom Line
Q1 bestätigt operative Fortschritte (Throughput, Outsourcing, Auftragspipeline) und bescheinigt solide Nachfrage; kurzfristig bleibt Cash‑Conversion und Vertrags‑Timing (vor allem U‑Boote) das wichtigste Risiko. Für Aktionäre: Guidance bestätigt, Upside durch große Rüstungsrahmen und Autonomie‑Geschäft — Cashflowentwicklung bleibt der bewertungsrelevante Beobachtungspunkt.
Huntington Ingalls Industries — Q4 2025 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2025 HII Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]
I would like now to hand the call over to Christie Thomas, Vice President of Investor Relations. Mrs. Thomas, you may begin.
Thank you, operator, and good morning, everyone. Welcome to the HII Fourth Quarter 2025 Conference Call. Matters discussed on today's call that constitute forward-looking statements, including our estimates regarding the company's outlook involve risks and uncertainties and reflect the company's judgment based on information available at the time of this call. These risks and uncertainties may cause our actual results to differ materially. Additional information regarding these factors is contained in today's press release and the company's SEC filings. We will also refer to non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations page of our website at ir.hii.com.
On the call today are Chris Kastner, President and Chief Executive Officer; and Tom Stiehle, Executive Vice President and Chief Financial Officer.
Now I'll turn the call over to Chris.
Thanks, Christie. Good morning, everyone, and thank you for joining us on our Fourth Quarter 2025 Earnings Call. Before discussing the results, highlights and guidance, I'd like to take a moment to reflect upon our progress over the past year. The solid results we posted this morning are the outcome of a measurable increase in Shipbuilding throughput, a key indicator for scheduled performance.
During 2025, in partnership with our government customers, we've taken steps to increase our hiring, improve our retention and strengthen proficiency levels within our workforce. What these efforts represent our thousands of skill shipbuilders, engineers, technologists and professionals who are committed to HII's mission. I'd like to say thank you to our 44,000 employees. Every improvement in our operations, every efficiency we unlock, every day we reduce from a schedule translates directly into capability our customers urgently need and can deploy to protect American interest.
Now turning to our 2025 results. Revenues of $12.5 billion grew 8.2% and EPS was $15.39. 2025 awards totaled $16.9 billion. All 3 of our divisions reached record revenue levels and hit key milestones. Now I'd like to share some of the 2025 division highlights starting with Mission Technologies.
In 2025, Mission Technologies delivered another year of top line growth with record revenues topping the $3 billion mark for the first time. Throughout 2025, we announced key milestones that highlight the breadth of our defense technology offerings. These included developing the U.S. Army's high-energy laser weapon system debuting [ Grim ] spectrum dominance EW solution delivering [ line fish ], small unmanned underwater vehicles to the U.S. Navy, expanding shipboard and [indiscernible] based training for U.S. and coalition forces and delivering our 750th REMUS Autonomous Underwater Vehicle.
To accelerate support of a hybrid fleet, we unveiled the ROMULUS family of unmanned surface vessels powered by our own Odyssey autonomy software suite, and construction of the first prototype is well underway on the Gulf Coast. In summary, the Mission Technologies team is executing well, and we are confident in continuing this success, particularly given how closely our portfolio maps to our defense customers' needs.
Shifting to Shipbuilding. At Ingalls, we delivered our second Flight III destroyer, DDG 128 Ted Stevens, launch DDG 129 [ Jermi Denton ] and authenticated the [ Kil ] DDG 135 [ stad Cochran ]. Also in January, we completed sea trials on DDG-1000 [ Zumwalt ]. On the [ Entyvio ] ship programs, we christened [ LPD 30 Harrisburg ] and began fabrication of LPD-32 Philadelphia, and LHA-8 Bougainville is actively in the test program and has achieved generator light-off. We also signed a memorandum of agreement with [ HD ] Hyundai Heavy Industries, reinforcing our strategic collaboration to explore future partnership opportunities. Additionally, in December, the U.S. Navy announced a golden fleet, which includes the Trump class battleship as well as a frigate which will leverage the proven design of the Ingalls built legend class national security cutter. I have great confidence in Ingall's team to execute this program and in our ongoing efforts with our partners to successfully expand the U.S. shipbuilding industrial base to meet the Navy's needs.
In 2025, at Newport News Shipbuilding, we delivered Virginia-class submarine, SSN 798 Massachusetts launched SSN 800 Arkansas, laid the [ keel ] of SSN 804 [ bar ], [ an undocked ] SSN 796 New Jersey in preparation for redelivery to the fleet. We also delivered the [ bowl ] of the first Columbia class submarine SSP and A26 District of Columbia.
In our aircraft carrier programs, last year, we completed dock trials on CVN-79 Kennedy and the team is now finishing up for first sea trial evolution, moving another step closer to preliminary acceptance and delivery. In addition, having completed deck over of both engine rooms post receipt of the remaining major interim components, CVN-80 has now reached 50% erected in the dry dock and CVN-81 keel units are in fabrication, and we continue to receive major material components in support of production. After delivering 2 ships in 2025, DDG 128 and SSN 798 we expect to deliver another 2 ships in 2026, SSN 800 and [ 330 ] as well as complete preliminary acceptance of CVN 79. I'll note that we've accelerated our forecast of LPD-30 delivery into 2026 and adjusted LHA-8 Bougainville delivery to 2027. This ensures that we avoid any potential conflicts, people or equipment and establishes clear and consistent priorities for the joint Ingalls and Navy teams throughout all the interim milestones leading to delivery.
Now I'd like to update you on our operational initiatives. In 2025, we set out to improve throughput and achieved 14% year-over-year increase. As we continue to invest with our customer partner in our workforce, facilities, technology and supply chain, we've established our 2026 target to increase throughput by another 15%, supporting the throughput increase, we hired over 6,600 shipbuilders in 2025 and expect to hire at least this many in 2026. Given recent investments in wages and workforce, we expect continued improvement in our retention rate, and we'll continue to develop our workforce to maximize productivity. Also, we plan to continue to ramp our distributed shipbuilding strategy. While we doubled outsourcing year-over-year in 2025, we are planning to increase outsourcing by another 30% in 2026.
Our second operational initiative in 2025 was a cost reduction target of $250 million, which we met by removing mostly overhead and support labor costs for improved efficiency. Lastly, we expect several shipbuilding contract awards in 2026, including Virginia Class Block 6, [ Columbia Bill 2 ], CVN-75 [ RCOH ] and CVN-82 [ long-lead ] material.
Regarding capital allocation, we've historically taken a very balanced approach, leading with reinvestments into our shipyards. Stakeholders that have visited our yards have seen firsthand the tremendous amount of investment we have made over the past decade at both Ingalls and Newport News. In 2026, we will again target hundreds of millions of dollars of capital investment in the shipyards. Specifically at Newport News, these projects include finishing a multipurpose carrier refueling and overhaul work center, making peer updates to support carrier inactivation significant investments in manufacturing centers of excellence to support higher submarine throughput and completion of the new parking garage that began construction in 2025.
Now I'd like to say a few words about guidance, and Tom will provide more detail in his remarks. With our keen focus on execution, the progress made this past year the large investments in shipbuilding and the unprecedented demand for our products and services, we are raising our medium-term shipbuilding revenue growth guidance from approximately 4% to approximately 6%. We did have some sales driven by material timing move into 2025 that were expected in 2026. So our current year outlook for shipbuilding revenues is between $9.7 billion and $9.9 billion and shipbuilding margins in the range of 5.5% to 6.5%. For Mission Technologies, we expect revenues between $3 billion and $3.2 billion and margins of approximately 5% with EBITDA margins between 8.4% and 8.6%. Our free cash flow outlook for 2026 is between $500 million and $600 million.
Turning to activities in Washington for a moment. Congress on a bipartisan basis passed the National Defense Authorization Act for fiscal year 2026 in December. The fiscal year 2026 NDAA strongly supports our shipbuilding programs including incremental funding and block buy procurement authorization for CVNs 82 and 83. Incremental funding and procurement authorization for up to 5 Columbia class submarines and continuous production authority for a range of Virginia-class components to optimize construction schedules and supply chain resilience.
The fiscal year 2026 defense appropriation bill shows strong support for our programs. The bill includes continued incremental funding for CVN-80 and 81 along with advanced procurement for CVN 82. Continued funding for CVN 74 RCOH, funding for the Virginia-class and Columbia-class submarine programs, advanced procurement for the DDG-51 program and funding for long-lead materials for the new [ Forge ] program. Combined with the shipbuilding funding provided in the budget reconciliation bill that was enacted into law in July 2025, the FY '26 defense appropriations bill continues the strong support for the shipbuilding industry.
In summary, we have made meaningful progress over the past year and have increased throughput and improved execution. We must build on this momentum and continue to increase our shipbuilding throughput. The U.S. Navy and all of our defense customers need our ships and technologies now more than ever. The global security environment demands that we operate with a sense of urgency and purpose that matches the seriousness of the threats to our nation faces.
Now I will turn the call over to Tom for some remarks on our financial results and guidance. Tom?
Thanks, Chris, and good morning. Today, I'll review our fourth quarter and full year results and also provide some additional color regarding our outlook for 2026. For more detail on the segment results, please refer to the earnings release issued this morning and posted to our website.
Beginning with our consolidated results on Slide 6. Our fourth quarter revenues of $3.5 billion increased approximately 16% compared to the same period last year. The higher revenues were driven by growth at all 3 segments. Ingalls fourth quarter 2025 revenues of $889 million increased $153 million or 21% compared to the fourth quarter of 2024, driven primarily by higher volumes on [ antibiasaltchips ] and surface combatants. At Newport News fourth quarter 2025 revenues of $1.9 billion increased $303 million or 19% from the fourth quarter of 2024, primarily due to higher volumes in both submarines and aircraft carriers. At Mission Technologies, fourth quarter 2025 revenues of $731 million increased $18 million or 2.5% from the fourth quarter of 2024, primarily driven by higher volumes in Warfare Systems, global security and unmanned systems.
Moving to Slide 7. Segment operating income for the quarter was $195 million and segment operating margin was 5.6%, this compares to $103 million and 3.4%, respectively, in the fourth quarter of 2024. Results at all 3 segments improved compared to the fourth quarter of 2024. Ingall's fourth quarter 2025 operating income of $68 million and margin of 7.6% compared to $46 million and 6.3%, respectively, in the fourth quarter of 2024. The improvement was due to the higher volumes I noted as well as lower unfavorable cumulative adjustments for [ anphybious ] assault ships and surface combatants compared to the fourth quarter of 2024.
Newport News fourth quarter 2025 operating income of $84 million and margin of 4.4% compared to $38 million and 2.4%, respectively, in the fourth quarter of 2024. If you recall, these results are lapping in the fourth quarter of 2024, which included unfavorable accumulative adjustments for Virginia-class submarines and new carrier construction as well as contract incentives related to the Columbia-class program. Fourth quarter 2025 results also include favorable contract adjustments on the Virginia-class program. Shipbuilding margin for the fourth quarter of 2025 was 5.5%.
Mission Technologies fourth quarter 2025 operating income of $43 million and segment operating margin of 5.9% compares to $19 million and 2.7%, respectively, in the fourth quarter of 2024. The improvement was driven by better performance in Warfare Systems global security and unmanned systems as well as the high emission technologies volume I noted earlier. Net earnings in the quarter were $159 million compared to $123 million in the fourth quarter of last year. Diluted earnings per share in the quarter were $4.04 compared to $3.15 in the fourth quarter of the previous year.
Moving on to consolidated results for 2025 and Slide 8. Revenues of $12.5 billion increased $949 million or 8.2% compared to 2024. While each segment contributed to the higher revenue, growth was particularly strong at Ingalls and Newport News shipbuilding. Ingall's revenues of $3.1 billion in 2025 increased $311 million or 11.2% from 2024, driven primarily by higher volumes in surface combatants and [ initial ] ships. At Newport News, 2025 revenues of $6.5 billion increased by $538 million or 9% from 2024 due to higher volumes in both submarines and aircraft carriers. At Mission Technologies 2025 revenues of $3 billion increased $107 million or 3.6% from 2024, primarily driven by higher volumes in Warfare Systems, global security and unmanned systems.
Moving to Slide 9. Segment operating income for the year was $717 million, and segment operating margin was 5.7%, this compares to $573 million and 5%, respectively, in 2024. Ingalls operating income of $233 million and margin of 7.6% in 2025 compared to $211 million and 7.6%, respectively, in 2024. The increase in operating income was primarily driven by the higher volumes noted earlier and favorable contract adjustments and surface combatants partially offset by lower performance in amphibious assault ships.
Newport News 2025 operating income of $331 million, a margin of 5.1% compared to $246 million and 4.1%, respectively, in 2024. The increases were primarily driven by favorable contract adjustments in the Virginia-class submarine program partially offset by contract adjustments and incentives in 2024 in the aircraft carrier refueling and complex overhaul program.
Shipbuilding margin for 2025 was 5.9%, within the guidance range we provided for the year. And consistent with my commentary on our last earnings call. This represents a 70 basis point improvement over 2024s results. Net cumulative adjustments for the year were negative $28 million. Newport News net cumulative adjustments was negative $64 million, which included adjustments related to CVN 80 and CVN 81 carrier construction. The negative Newport News cumulative adjustment was partially offset by positive net cumulative adjustments at Ingalls of approximately $16 million, in Mission Technologies of approximately $20 million.
Moving on Mission Technologies 2025 operating income of $153 million and segment operating margin of 5%, both improved from $116 million and 3.9%, respectively, in 2024. The improvement was driven primarily by the lower purchased intangible amortization, better performance in warfare systems as well as higher revenue volumes noted earlier. Mission Technologies 2025 results included approximately $89 million of amortization of purchased intangible assets compared to approximately $99 million in 2024. Mission Technologies EBITDA margin for 2025 was 8.6%, up from 7.9% in 2024. Net earnings in 2025 were $605 million compared to $550 million in 2024. Diluted earnings per share in 2025 were $15.39 compared to $13.96 in 2024.
Turning to cash flow on Slide 10. 2025 free cash flow was $800 million, above the guidance range we had provided for the year as we finished the year very strong from a working capital position, slightly underran our planned capital expenditures for the year. During the year, the company invested $396 million in capital expenditures or 3.2% of sales as we continue to prioritize investments to drive higher throughput in our shipyards. We paid dividends totaling $213 million in a year and did not repurchase any shares during the year. We ended 2025 with $774 million in cash and cash equivalents on hand and liquidity of approximately $2.5 billion. Cash contributions to our pension and other postretirement benefit plans totaled $54 million in 2025. You can find our updated 5-year pension outlook in the appendix of today's presentation on Slide 14.
Turning to Slide 11 and our financial outlook. First, I will highlight that the guidance we are providing today is predicated on achieving the shipbuilding throughput improvements that we've outlined as well as reaching agreement on the next Virginia and Columbia class submarine contracts in the first half of the year.
Regarding our multiyear targets, we're updating the medium-term growth targets that we have provided previously. We now expect the consolidated HII medium-term top line CAGR of approximately 6%. This is comprised of shipbuilding growth of approximately 6% and Mission Technologies growth of approximately 5%. We believe this shipbuilding growth has additional upside as the forecast does not yet account for the recently announced frigate or battleship programs. we will need to revisit these growth assumptions once we have a better understanding how each of these programs will proceed forward.
Regarding our 2026 expectations, Chris provided our outlook, but let me provide a bit more color on our free cash flow expectations for the year. We expect 2026 free cash flow of between $500 million and $600 million. At the midpoint, that puts combined 2025 and 2026 free cash flow at $1.35 billion, an increase from the $1.2 billion target we discussed last quarter for the 2-year projection. As I noted earlier, we finished 2025 very strong from a working capital perspective. Overall, working capital was a tailwind of approximately $170 million in 2025.
We think careful working capital management, along with beneficial cash tax impacts from the One Big Beautiful Bill will continue to be a cash tailwind in 2026. As Chris mentioned, we continue to prioritize strategic capital investments into our shipyards, we expect 2026 capital expenditures to be approximately 4% to 5% of sales. This represents approximately $500 million to $600 million of investment to drive capacity and throughput. You can find additional 2026 guidance elements on the 2026 outlook table on Slide 11 of the presentation or in the earnings release. This includes an anticipated 2026 effective tax rate of approximately 17%. This lower tax rate is primarily attributable to an expected reduction in total tax expense related to research and development tax credits.
Turning to our provided look ahead for the first quarter of 2026. We expect approximately $2.3 billion for shipbuilding revenues and $700 million to $750 million of Mission Technologies revenues with shipbuilding operating margin near 5.5%, in Mission Technologies operating margin up between 4% and 4.5%. Consistent with normal cash flow cadence and we expect first quarter free cash flow to be negative, representing a use of approximately $600 million as some of the fourth quarter working capital benefit unwinds.
To close my remarks and echo Chris' comments, we have exited 2025 with good momentum and are focused on a clear set of goals and objectives for 2026 that are aligned to our customers' needs and our national security while continuing to create value for the HII enterprise.
With that, I'll turn the call back over to Christie for Q&A.
Thanks, Tom. [Operator Instructions] Operator, I will turn it over to you to manage the Q&A.
[Operator Instructions] Our first question is from Robert Stallard from Vertical Research.
2. Question Answer
Chris, I'd like to follow up on those productivity numbers that you gave, the 14% progress in 2025. I was wondering if the performance there was the same across the various shipbuilding programs and then how much more is needed, for example, on the Virginia-class, if you're going to get consistently to a year?
Yes. It was pretty broad-based improvement across the programs. The Virgina-class program actually did very well. in 2025. Remember, those schedules were reset post COVID. So there's an incremental walk-up in throughput required to get to the 2 Virginia-class per year. But they had a very good year last year but it was really broad-based improvement across the portfolio, both at Newport News and Ingalls.
Okay. And then quickly as a follow-up, you mentioned that there's a step-up in CapEx this year. How do you expect the long-term CapEx to progress from here? Do you expect it to remain around 4% of sales going forward?
Well, we don't have guidance beyond this year yet, Rob. But I do expect it to continue to be elevated simply because there's such opportunity out there. Tom, I don't know if you want to give any more additional details related to that. But I do expect it to continue to be elevated and but we're not going to provide additional guidance at this point.
That's right, Chris. I'll just comment on that. And as he says there's opportunity -- the awards are plentiful going forward. And obviously, that's going to drive the top line is going to be a need for capital and investments from our Navy partner and ourselves in that. So I haven't provided that yet, but I would expect it to be higher than where we've been in the past and probably consistent with where we are right now going forward in 2026.
Our next question is from Doug Harned of Bernstein.
So you saw really good revenue growth in Q4 in both yards. And Newport News, though, your margins are still pretty low. Tom, you mentioned the 2 negative [ EACs ] on the CVN program. But when you look across the programs at Newport News, my assumption is you're working hard to get those margins higher. How do you see each of the programs in terms of their ability to improve and get to the goals that you're really looking for longer term?
Yes. So when we look at Newport News and the EACs are stable, the booking rates, obviously, we want to get those up right there. That's going to be a function, as we've described in the past of working off the existing portfolio we have right now. And we have these pre-COVID ships that have been impacted by scheduled inefficiency. And as those continue to evolve out, we talk about the portfolio in 2027 becoming more post than pre-COVID, that's going to assist in that list. I believe what we've done in wages and what we've done in contract adjustments some change management REAs that we have in that, we'll assist in that, too.
A piece of that we're seeing at Newport News is fairly consistent across all 4 quarters there. It's just a mix of the portfolio itself, contract type additional work scope that we have. The growth, which is good on the top line is coming about both in labor and material, but on the material side, it's hitting contracts that either advanced procurement, which have restrictions on margins and fee right now. And then as we kind of work ourselves forward and definitize either those contracts and new contract awards, we'll see a moderate ramp in either fee on the existing contracts or incentives that can come in place on the new avoids there. So that's the playbook going forward. We're working hard to kind of stabilize performance. We've seen improvement in hiring, attrition, moderately improvements in rework. So the stabilization you see making our milestones working off the existing portfolio and getting into those stock contracts?
Well, when you look at -- when you look at -- you've got a lot of money for the industrial base of those last 2 Block 5, both. And as you commented, the '26 budget has really in a big support for shipbuilding. One of the things that we found challenging is the money can be there, but it's getting it through the throughput that you're talking about. Right now, you've probably seen a lot of the commentary about a pretty significant addition to the 2027 budget potentially, which could include money for the industrial base. When you look at it from a shipbuilding standpoint, do you need more? Or are you in already a good position given the large amount of funding that's come in is that enabling you to get where you need to be with respect to the -- to your industrial days?
Yes. So Doug, let me take that, and I can -- Tom, if he wants to add, that's great. But definitely, the Block 5 2-boat contract assisted us from a capital standpoint and a wage standpoint to increase throughput at Newport News, there is more capital required we're going to continue to ramp the throughput within Newport News on the submarine program and the aircraft carrier program. So there will be additional capital requirements. We hope to partner with our Navy customer to provide that capital, both our internal capital as well as incentives. But there's plenty of opportunity to increase throughput in both internally within the shipyards and then through distributed shipbuilding as well because it's not just labor, it's not just additional labor and throughput within the shipyards. We need to expand distributed shipbuilding as well. We had a pretty good year last year. We'll have another good year this year in expanding the industrial base and some of the investments could go there as well. So we welcome the opportunity to continue investment to increase throughput, and we're going to continue to do that.
I'd piggy back on the backside of that. I'm with you about the budgets and opportunity sets there. We're seeing it flow into the company. So it's not just on the budget line. Both Q3 and Q4 saw our HII have quarters of 16% growth. We finished out the year -- this year in 2025 at 8.2% growth from '25 over '24. We saw a shipbuilding at 9.7%, for the year for '25 over '24. And I'm inspired by several quarters now in a row of seeing double-digit growth in shipbuilding, Ingalls was at 11.2% and Newport News 9% for the year. So the dollars are there. There's a need for our products and services. The funding is in place, both with our backlog and anticipated awards that we have coming in 2026.
And I'm happy to see an inflection of the labor material flowing into the yards, increased outsourcing. We've established over 23 vendors last year, and there's more to follow going forward. you can see from our earnings release, we're going to increase -- we've increased outsourcing by 100% last year. We have a 30% target this year. So the inflection that we've discussed is happening right now. The guide right now at 6% is probably a conservative guide at the beginning of the year, let's get into it. We've beaten that the last 2 quarters, and we'll see that we can continue hiring, retention and outsetting.
Our next question is from Scott Mikus from Melius Research.
A quick question. Ingalls and Newport News, both exited '25 with a lot of top line momentum. You did note that the fourth quarter had some pull forward but the first quarter guide, if my math is right, calls for shipbuilding sales to be up 13% year-over-year. But then that implies that shipbuilding sales are down 1% for the remaining 3 quarters. Is that just a function of tougher comps because it seems like you have a healthy amount of opportunity based on the milestones laid out in the slides.
Yes. I wouldn't get too tied up in how that plays out for the whole year. There's a lot of timing in that, both we saw a little bit material unexpected EBITDA guide we gave you going from [ 89% to 91% to 909 ] more and then we came out at [ 9.5% ]. So there's some material like a pull to the last. I would tell you it's not a onetime trick there of getting revenue up in Q4 because as I just answered in the previous question, Q3 and Q4 saw some good growth. The backlog and the new awards are going to facilitate that and then the outsourcing and the hiring is going to continue that.
I think it's more just a conservative guide that we have right now at the beginning of the year. We want to make sure we continue with the momentum we're exiting last year on the top line. And I would anticipate -- I expect that to continue going forward here. So there's always some choppiness from quarter-to-quarter on milestones and margin recognition on ship deliveries and major milestones. So there's nothing overly to highlight that's going to be problematic as the revenue I expect to continue to ramp into 2026.
Okay. And then on the new battle ships, is there a possibility that a Japanese or Korean shipyard could fund some of the CapEx to fulfill their obligations under the recent trade deals? And then you contribute the workforce and the design, sort of in a joint venture-type format that way would be an attractive investment for Huntington from a return on invested capital standpoint?
Yes, I'm really not sure. I think the aperture is open relative to the industrial base and how that battle ship is going to get built. There's a need for additional capacity in the industrial base and could a foreign investor bring more capacity into the industrial base, sure, I don't know if it'd be necessarily for the battleship but that's always an opportunity. So you need to keep the aperture open and depending on how the acquisition profile or the acquisition strategy develops than I think the investments will follow.
Our next question is from Noah Poponak from Golden Sachs.
So I guess if I kind of zoom out and look at the shipbuilding margin, it's kind of flattish through 2025. I mean it's actually down sequentially a little bit through '25, '26 guidance kind of flattish versus '25, recognizing it's a long-cycle business and manufacturing process and these things take time. I guess just with the incremental funding, the throughput achievements, the labor achievements, Tom, you just reiterated better mix of contracts by '27. Help us better understand how the shipbuilding margins are flat for that full 2-year window? Do they snap in '27 when the mix flips to more post-COVID? And to what extent is the weighting on the next batch of nuclear subcontracts pretty binary in this discussion because you have to book so much long lead at a low margin before you get that?
Let me start on that Noah and then Tom can chip in on the back end. But I mean you know our process I think, relative to how we evaluate risk and opportunities when we do our plan, and we're very disciplined in how we evaluate them and how we develop our guidance for the subsequent year, and that's what we've done.
I would say that we are -- there's investment required that we're making in outsourcing and overtime to prioritize schedules on these ships, which is impacting our profitability. There's no doubt. We think that makes sense. We're going to continue to do it because the strategy to get out of these ships into the next ships just makes great sense.
Relative to the submarine program, we think that needs to get done by the end of -- into the first half of the year. We need to make sure that we don't incur risk related to a delayed start on that program. The teams are meeting. I have high hopes that after the '26 budget was done and then the '27 budget, we get a little more clarity that everything will fall into place and we'll get started, but we really need to get that done in the first half of the year. Tom, I don't know if you have anything else.
I have some comments for you, [ Scott ], and the Street there. So to your point on the -- with the new contract starts that are coming with the awards and we book low, that's baked in already into the guidance that we [indiscernible], right? So nothing's changed just because those awards are coming and what we gave you in 2026. And then Chris and I have said that, hey, the 9% to 10% is not just aspirational we've been there before and we want to get there. We haven't given the Street the timing of that. We've said incrementally, we would expect to improve annually. And we still feel that way right now, going from '25 to '26.
If you think about '24, it was 5.2%, '25 it was 5.9% that's up 13%. And although we gave you a range of 5.5 to 6.5, it's kind of in line. Chris said back Q3 and '24, had the next 18 to 24 months, it's going to be choppy [indiscernible] are going to work off these old ships. So a reguide of what we gave you last year is not inconsistent and EBIT in Q3 when I gave you the said it's around the midpoint. It could be a little bit higher with the awards. It could be a little bit lower with [indiscernible]. So we didn't get the awards in '25 they've fallen into this year. We finished at 5.9% [indiscernible] we're not surprised or it's off what we've been talking about that we're dealing with here.
I'd tell you that the range is consistent in '26 infrastructure in '25. We finished the '25 at [ 5.5% ] for the quarter. And when we look at Q1 right here, there's not pleather of milestones or sell off that's going to change with the last 13 weeks for the next 13 weeks. So again, if we think about it, we shouldn't be surprised that we guided fairly conservative at the beginning of the year and consistent with what the actuals were for Q4.
As we look at Q4, this timing in there there's a higher volume of the new starts that I've talked about, advanced procurement that kind of either no fee or limits fee. So we'll work that off. And then the material, which is good for the top line pulls a little less fee on a couple of our contracts as we work ourselves through that. The 5.5% to 6.5%, it's still a good range of outcomes. Last year, it was just about at the midpoint without the award. So we're expecting those on what's to happen this year. In my remarks, I said in the first half of the year. And then with the milestones that we've given you in this Q2, Q4, we provided the milestones. We met most than last year, and we expect to go do that most all of them this year. So that's going to be a lift on where we go forward here. The awards will have some incentives to them to that we didn't have last year, so that's going to be an assist as we go forward.
And then I mentioned the increase from the 5.2% of '24 to 5.9% of 2025. And the midpoint of 6%, although moderate, is still kind of better than the actual of last year, and we have a whole year to go work the contracts here. And then kind of lastly, as Chris said, it was baked in already, but we have had -- as we put focus on milestones and delivering the ships as fast as possible for our Navy customer we have put a premium additional overtime. We have both sites working high over time than usual. So there's a little bit of [indiscernible] on cost efficiency on that. And then the first outsourcing and first-time bills just a little bit of extra cost. And not unanticipated, again, it's all in our guide and our progression as we turn the portfolio heading towards 2027. I hope that was helpful.
That was very helpful. It's a lot of detail, and I appreciate it. When you provided the shipbuilding medium-term revenue growth target, the 6%, you have the sub bullet point there that has additional upside from recently announced programs. Can you talk a little bit more about that? I mean how much upside? And specifically on the SSC win, when does that start ramping up for you?
Yes. So yes, thanks, Noah. The a frigate win that pretty confident -- very confident we're going to build the first 2 boats or first 2 ships in that class. We're unsure what the acquisition strategy is beyond that. I think we'll learn more when the '27 budget comes out. But we're fortunate on that program that we still have a lot of material from [ NC11 ], which is really a lot of the upfront cost on a ship. So I don't expect material impact to sales this year. It should start to ramp in '27.
The battle ship is a little different. We're still engaged with the Navy on understanding how that design is going to unfold with us, the Navy and BIW. So there will be modest revenue this year and then a little ramp from there. We don't have specific numbers for you right now. But as we understand them, we will provide them.
Our next question is from Pete Skibitski from Alembic Global.
Chris, could you talk more about the supply chain. Chris, can you talk more about supply chain at Newport News? I think you touched on it in your remarks. I didn't hear all of it. Did you receive all the equipment from the supply chain that you expected in the fourth quarter on CVN 80? Or was it later than expected? Is that what drove the negative EACs? And kind of where are you right now in that program? And just want to get a better sense of that.
Yes. So we have received all of the engine room material done deck over. As I said in my prepared remarks, we're 50% erected, and we'll continue to make progress this year. Have a little bit of momentum on that program. Throughput has actually accelerated and the key there is to getting back in sequence, which they're working very hard to do. So it did -- there was investment in over time on 80 to get back on schedule or try to get back on schedule as I said, they're working hard to do that.
Okay. Sounds good. And then just, Chris, between reconciliation and the '26 appropriations bill that's law now, did you get all of your priorities through in the budget this past year that you wanted? Just wondering if there's anything that didn't get into those bills that is going to be a priority for you in fiscal '27?
No. It's universal support for shipbuilding and reconciliation the '26 budget. The potential '27 budget, it's all on us to execute now. But all of our programs are supported.
Our next question is from Seth Seifman from JPMorgan.
I wanted to follow up quickly on the frigate. I think you talked about that being a driver of potentially of growth in 2027. I mean given the target of having a boat in the water in 2028, should we think about that ramping up rather quickly? And is there anything you could say about the magnitude of the lift there at Ingalls and what it will do to the mix as well, given that the -- I think the NSC was a very profitable ship for that yard.
I think it's a little bit too early for that. I think if you were to project the cost related to ship getting in the water in 2 years, less the long-lead material. There's probably enough data out there for you to figure out what that could mean from a sales standpoint. So that is upside. But beyond that, I think it's a little bit too early to talk about potential top line upside related to that until we get a little bit further along.
Okay. Okay. And should we think about that being mix-wise being NSC like?
I wouldn't necessarily think that, right? We're going to work with our customer to get a fair deal on that contract. So I wouldn't necessarily think about that. I think on a blended rate, getting to 9% to 10% margin is still our objective, and I think we'll eventually get there.
Okay. Okay. And then just to follow up, given where you ended the year with the cash balance, and what you're forecasting for '26 to have a decent amount of excess cash on the balance sheet. But by year-end, I know there's understandably a certain amount of reticence about repurchases at this point. But with good performance, does that become more of an option? Or are there other things you would think about doing with it? Or do we just kind of maybe sit with some excess cash for a little while?
Remember, in the words of one of my predecessors, cash can be pretty lumpy. So it will continue to be lumpy in shipbuilding. But we think the overwhelming opportunity from a value standpoint is to continue to invest in the shipyards. So we're going to do that. It's going to improve both the top and bottom line. So that's our focus right now, and it's been our focus for a while.
Our next question is from John Godyn from Citigroup.
I wanted to just revisit shipbuilding margins on more time. There was a lot of good detail. I think you made clear that there is some conservatism in the outlook. What I'm interested in is in the first quarter, you have shipbuilding margins kind of at the low end of the full year guidance, it suggests that the conservatism is more of a back half event as it plays out. Is that right? Or is that not? Can you help us just think about the shape of margins throughout the year? And is that conservatism something in the back half? Or might we just see a stronger start to the year than expected as you suggested?
Yes. So obviously, we give you the annual guidance, 5.5% to 6.5%. We've been giving for the last couple of years, the next quarter, so it's 5.5 that kind of leaves you guessing for Q2, Q3, Q4. I'd say you stay consistent with just what you've seen from us over the years. It's about the milestones. It's about performance. It's about the deliveries. There's nothing that's going to alter it one way or the other, other than timing, how we perform over the next 11 months. And then the awards themselves will bring about a good balance affordability to profitability, the contract terms and conditions. There'll be some incentives in there. So we'll have to work ourselves through that. I'm not going to give any more comment on that as we're in negotiations through negotiations as that effort is trying to get through approval cycle right now.
But yes, I mean, I think it's the beginning of the year. We don't want to get ahead of ourselves. And really it makes sense that we exit Q4 5.5% kind of run rate over there. So we've got a whole path at this number. We'll update you in May, and you're going to look to see both for what's going to happen as a forecast in Q2. We have hinted that we'd like to see the awards -- expect the awards for the first half of the year. So that's going to facilitate a good pace and a trajectory of at least midpoint Nevada going forward here for the year.
I guess my question is, is it even possible that we start the year at the higher end at 6.5% that we fast forward a quarter or 2 when we realize that we delivered numbers like that or in terms of the art of the possible, that's not even on the table?
The range is for the entire year, I'd stay focused on what we gave you for the quarter.
Okay. Fair enough. And then if we just double click on the milestones and the time line. As you guys know, with deliveries, with the milestones, there's an intense focus on different milestones as we get closer to the date. Are there any milestones or delivery base that you would just flag for us right now to kind of bracket and sensitize a little that one that might be pushed a little bit more than others, just so that we can have that conversation now instead of on eve of expecting some sort of delivery or milestone event. Any risk around anything that you would just kind of take the opportunity to bound for us?
Sure. Delivery of 30 and the delivery of 800 towards the end of the year, very focused on getting both of those boats done. So those -- that's how I call it, from a risk standpoint and an opportunity standpoint, those 2 -- that boat and that ship are very critical to us.
Our next question is from is from Scott Deuschle from Deutsche Bank.
Tom, do you expect the company to make money on CVN 80 and 81, given this trend of negative EACs?
Yes. Well, yes, we do. We think we booked accordingly right now. We've described what transpired on those ships upfront will be impacted by some material that goes deep into the ship that risk is behind us. Obviously, that's caused an impact on the schedule. So the schedule is a little bit longer and has created some cost efficiency be working. 80 specifically out of sequence. But with the deck over right now, the team is seriously working with the experience to have building carriers getting that back on sequence getting out of the dry dock and then doing the ship show we're kind of going to here, but we have not forecasted and we do not expect it not to be profitable.
Okay. And then, Chris, there are a lot of data centers under construction in the state of Virginia. It looks like within an hour or to drive from Newport News, are you seeing that have any kind of impact on the labor situation at Newport News, particularly for trades like electricians or pipe fitters?
That's interesting. We haven't seen the impact and the applicants and the hiring of Newport News was very, very strong over the back half of the year. So we haven't seen it yet. We'll watch out for it. We're fortunate in the regional workforce development centers have been coordinating with the federal government, state governments to produce good shipbuilders, and we're going to continue to work on that pipeline, but we have not seen that.
Our next question is from Myles Walton from Wolfe Research.
Tom, I was wondering -- I'm wondering if you can give us a little bit more color on the improvement in attrition because I'm trying to put the math together, you hired 6,600 shipbuilders. I think you've got another 500 employees from [indiscernible] International's acquisition, but I also think that you finished headcount flat versus the start of the year. So walk me through what your definition of improvement in attrition is did you end up with the headcount you expected? And then do you expect headcount to grow in '26?
So let me start and if Tom has anything additional he can add it. So attrition did improve year-over-year. It's about a 15% to 18% improvement across both shipyards. Both shipyards improved. In that data, the 4,000 employees, miles, we have supported labor in that as well. And obviously, Mission Technologies labor in that as well. So we did increase staff in both shipyards. We ended pretty much where we wanted to be, and we're in a pretty good place from an applicant flow on a hiring standpoint for next year.
So from a labor standpoint, we're in a pretty good place. We do need to continue to improve attrition and efficiency of the workforce, which we're working very hard at. But with that, we also need to continue to focus on distributed shipbuilding because in order to get through all of these ships, it's not just the shipyards that are going to be required to be more efficient. We need to work on distributed shipbuilding continue to qualify suppliers and make sure they're efficient in producing what they need to produce as well.
And to comment on that and Chris, is the next. What's the direct, it's Tom. I'll comment just on that. It's the mix of the labor. It's direct labor, the support, the job shop is that we have that's not in the number. And then there's outsourced work that we have. So all that goes into our ability to kind of ramp and both get more earned progress and get more work accomplished towards the milestones going forward?
Okay. And then 1 quick 1 on Mission Technologies. I think you're benefiting by another $20 million runoff in amortization, which should imply an 80 basis point step down in EBITDA margins basically very little growth in EBIT despite the $20 million runoff. Is that right? And if so, what's driving the year-on-year profile for Mission Technologies profit?
Yes. So you're talking about, I guess the guide? Or are you talking about how we performed the '25 to '24 on the guide to '26?
2026 has guidance the 5% EBIT but it should be benefiting, I believe, about 80 basis points of amortization runoff.
Yes. I think the amortization runoff is about $10 million improvement. So it's not as much as that. I would tell you that so that's a piece of it is about half of it. And then just the other half is what we're seeing in our contract performance, the maturity of how we're executing had some fee write-ups in 2025 that we took and there's a potential of opportunity sets in 2026.
Our nuclear business with equity income always has upside, and we have to see how the year plays out and how our scores are. We get evaluated by the customer set. So that's included in there. Although your question was specifically on the return on sales side, the EBIT side. I would tell you, on the EBITDA side, you saw we raised the guidance from [ 80 from to 85 ] last year, an [ 8.6 ] finish up almost 50 bps, [ 84 to 86 ].
Again, just the maturation of the portfolio. I'm trying to -- although it's predominantly cost-type contracts, trying to see where we can get the additional value of adding more products that services a little bit more how we bid these jobs and a focus on profitability there. So it's an incremental improvement. I like how we finished out from '25 versus '24 and it's good to see an incremental improvement on both metrics going forward in '26.
Our next question is from Gautam Khanna from TD Cowen.
Good morning, guys. Wanted to ask on Ingalls. I know there was -- and maybe you addressed it and I missed it, but the union contract, did you guys push the wage increases through in Q4? And was that part of the revenue upside at shipbuilding broadly in the quarter?
No, not at Ingalls, no.
No. And what's sort of the timing on that?
We expect to get through that in the first quarter. I don't want to comment directly on a union negotiations, but we're engaged heavily with the to get that done almost daily. So -- but we expect that to get done in the first quarter.
Got you. And just on the [ VCS ] Block VI and the Columbia class contract, what is your best sense on timing of when that might get awarded formally?
It's really hard to say. We need it before the end of the first half of the year in order to maintain our production schedules but it's just hard to say we're engaged heavily with electric boat and the Navy to get it behind us. And I think we will get it done. And as I said previously, the '26 budget getting done and then clarity around what's going to happen in '25 and the fit up, I think, really helps and after that falls into place, we can get those contracts behind us.
One thing I know for sure, the Navy is going to buy submarines. So we need to get it done before the first half of the year, so we can maintain the production schedules and make sure that is not a risk that we have to deal with.
And I would just love to get your perspective if you're willing to share them on how -- like this thing was expected at one point to be done north over a year ago than we were thinking year-end 2025. And is there any long bulls in the 10? Or is this just sort of [indiscernible] minor stuff that needs to get cashed out? Or is there a big -- I'm just curious if you can give us any sort of update just because we've been talking about it for north of a year.
No I just think it's a big complicated contract. And you have 3 parties involved that need to all be comfortable with what the solution is. Fortunately, those teams work very well together. But it's just a big complicated contract, and we need to get to the finish line here.
Our last question is from Mariana Perez Mora from Bank of America.
So my question is going to be about Mission Technologies and -- how should we think about the share of the mix towards like unmanned solutions, autonomy and those things in that portfolio? Because I would imagine those are growing double digits. And I'm wondering when we should start to see that reflected in the growth for that segment.
So interesting. Let me start here, and thank you for bringing up that question. We don't break out growth rates within Mission Technologies by market segment. But I will say that unmanned doing very well, unmanned undersea and unmanned surface as you can see by the launch of our new ROMULUS vehicles, I think it's interesting when you think about the new or the evolving Navy strategy around the hybrid fleet or the hedge fleet, that we're right in the middle of that with obviously a very keen understanding of large capital ships.
But then also being the largest provider of unmanned undersea vehicles and then have an unmanned surface vehicles all predicated upon an autonomy software that's really world-class. So from an unmanned standpoint, I do believe there's potential tailwinds there. But I think there's also tailwinds with the intersection between man and unmanned -- when you think about the [ Minitar ] suite that we provide for the Navy, we're the Chief Developer of that. So I think it's going to continue to evolve. I think it's going to continue to play right into our sweet spot. And thank you for the question, because I think it's something that's going to be very positive going forward.
And then when you think about those opportunities, right, and an administration that is leaning into what we're going to call like commercial terms. How do you think about like investing your own dollars, owning that IP and actually getting, I don't know, out of these like mid-single digit, like cost-plus type of like margins for that segment, I don't know, 5, 10 years from now? Is that a possibility? How do you think about like investments from that end?
I definitely think there's more profitability potential within that segment. I think the IP situation or that argument gets to be a little bit more complex because we actually design our autonomy software to Navy standards and it's open source, which allows you to plug and play and bring really good providers into the space. So that is a different argument. That's a different discussion on profitability. I do think that there's upside related to the unmanned space. I do think there's upside related to integrating the software into the product sets. And so that's why we've invested against it. And we will continue to invest it against it, and it's probably our highest source of IRAD internally within the organization.
I am not showing any further questions at this time. I would now like to hand back the call over to Mr. Kastner for any closing remarks.
Sure. Thank you, and thanks for joining the call today. Hey, I want to give a shout out to the CVN-79 team, both the sailers and the shipbuilders had a really great trial this week. It was an excellent week to be a shipbuilder, I'm proud of the team, and I think the ship performed very, very well and we'll keep that momentum towards delivery on CVN-79. So thanks, everybody, for joining, and we'll see you out there.
That concludes today's conference call. You may now disconnect.
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Huntington Ingalls Industries — Q4 2025 Earnings Call
Huntington Ingalls Industries — Q4 2025 Earnings Call
📊 Quartal auf einen Blick
- Q4-Umsatz: $3,5 Mrd. (+16% YoY)
- Jahresumsatz: $12,5 Mrd. (+8,2% YoY)
- Q4-Gewinn: Nettoeinkommen $159 Mio.; verwässertes EPS $4,04 (vs. $3,15)
- Segmentmarge: Q4 Segment-Operating-Margin 5,6% (vs. 3,4% Vorjahr)
- Free Cash Flow: 2025 $800 Mio., oberhalb der Guidance
🎯 Was das Management sagt
- Durchsatz: Shipbuilding-Throughput 2025 +14%; Ziel 2026 weitere +15% durch Hiring und Prozessverbesserung
- Arbeitskräfte: 6.600 Neueinstellungen 2025; mindestens gleiche Zahl für 2026; Fokus auf Retention und Qualifikation
- Industrielle Strategie: Ausbau Distributed Shipbuilding und Outsourcing (2025 Verdopplung, Ziel +30% 2026); gezielte CapEx‑Investitionen in Werften
🔭 Ausblick & Guidance
- Mittelfristig: Konsolidierter Umsatz-CAGR ~6% (Shipbuilding ~6%, Mission Tech ~5%)
- 2026-Shipbuilding: Umsatzprognose $9,7–9,9 Mrd.; Margen 5,5–6,5%
- Mission Tech: Umsatz $3,0–3,2 Mrd.; EBIT‑Marge ~5%; EBITDA‑Marge 8,4–8,6%
- Cash/CapEx: Free Cash Flow 2026 $500–600 Mio.; CapEx ~4–5% des Umsatzes (~$500–600 Mio.); erwarteter effektiver Steuersatz ~17%
❓ Fragen der Analysten
- Margenpfad: Analysten hinterfragten, wann Shipbuilding-Margen spürbar steigen — Management nennt 2027 als Zielpunkt, 2026 bewusst konservativ
- Vertrags-Timing: Nachfrage nach Zeitplan für nächste Virginia/Columbia-Verträge; Management peilt Abschluss in H1 2026 an, um Produktionspläne zu sichern
- Industrielle Kapazität: Outsourcing, Block‑Aufträge, Frigate/Battleship‑Optionen als Upside; konkrete Umsatzimpulse bleiben zeitlich unscharf
⚡ Bottom Line
- Bewertung: HII zeigt operative Verbesserung (Throughput, Margenanstieg YoY, starker FCF 2025) und hebt mittelfristiges Shipbuilding‑Wachstum an. Management priorisiert Reinvestitionen in Werften vor Kapitalrückgabe; nennenswerter Upside-Potenzial durch neue Programme (Fregatte, Battleship), aber Timing und Margenwirkung bleiben 2026 noch begrenzt.
Huntington Ingalls Industries — Q3 2025 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2025 HII Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the call over to Christie Thomas, Vice President of Investor Relations. Ms. Thomas, you may go ahead. .
Thank you, operator, and good morning, everyone. Welcome to the HII Third Quarter 2025 Conference Call. matters discussed on today's call that constitute forward-looking statements, including our estimates regarding the company's outlook involve risks and uncertainties that reflect the company's judgment based on information available at the time of this call. .
These risks and uncertainties may cause our actual results to differ materially. Additional information regarding these factors is contained in today's press release and the company's SEC filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations page of our website at ir.hii.com. On the call today are Chris Kastner, President and Chief Executive Officer; and Tom Stiehie, Executive Vice President and Chief Financial Officer. Now I'll turn the call over to Chris. .
Thanks, Christie. Good morning, everyone. The United States Navy recently celebrated its 25th birthday, and the U.S. Marine Corps will do the same in the coming weeks. So I would like to start today by thanking both of them for their enduring service to our country and their commitment to our national defense.
Thank you for all that you have done and all that you do to protect us and future generations. Moving on to the third quarter, I'll start by discussing our results and division highlights and provide an update on our operational initiatives, then Tom will provide some details on our financial performance and outlook.
Before I begin, I'd like to reiterate our commitment to accelerate shipbuilding construction to meet our customers' requirements. We continue to support the identification of strategies to increase throughput across our shipbuilding programs are working closely with our customer and partners to achieve this important mission.
Now turning to our results. This morning, we reported record third quarter sales of $3.2 billion and diluted earnings per share of $3.68. Shipbuilding sales growth of 18% year-over-year was driven by our shipbuilding division's focus on increasing throughput in our shipyards and supported by broader efforts underway to rebuild the U.S. Maritime industrial base.
Likewise, 11% sales growth at Mission Technologies was driven by our team's continued focus on delivering innovative solutions, including growth in the critical areas of C5ISR, Cyber electronic warfare and space and live virtual constructive training as well as unmanned systems.
Demand for our products and services remain strong. Third quarter contract awards were $2 billion, and our backlog is $56 billion of which $33 billion is funded. At Newport News, we continue to make progress on submarines and aircraft carriers. The last 2 Virginia Class Block IV submarines are in the water with SSN 798 Massachusetts having recently completed sea trials and preparing for delivery this year.
As for our carrier program, CVN-79 Kennedy, continues to make progress in this testing program, and we expect to conduct the ship's first sea trials around the end of the year, and shipbuilders are installing the large components that have now been received on CVN-80 Enterprise, which will allow erection progress to accelerate. Moving to Ingalls. In the third quarter, we successfully completed builder's trials for DDG 128 Ted Stevens, bringing me a step closer to acceptance trials and delivery our Antonius warship construction continues to make progress with both LHA-8 Buggenville and LPD-30 Harrisburg going through integration and testing in supportive trials next year.
At Mission Technologies, we had another strong quarter of sales at $787 million, along with a book-to-bill of 1.25 and announced key strategic partnerships around future opportunities. First, we joined forces with Babcock International to integrate HII's unmanned underwater vehicles with the Babcock submarine weapon handling and launch systems, while Rima 620 was validated for Torpedo 2 deployment. This will position our Torpedo 2 launch and recovery solutions for international markets.
We also announced a partnership with Shield AI to accelerate cross demand and modular Mission autonomy solutions in a partnership with TELUS to develop advanced autonomous undersea mine countermeasure capabilities. Additionally, we unveiled the raw miles family of unmanned surface vessels powered by Odyssey autonomy software and have started building the flagship Romulus 190. Romulus is 1 example of numerous projects and contracts underway in Mission Technologies that combines internally developed technology with world-class partner technology to create best-of-breed technology solutions for the war fighter.
Now shifting to an update on our operational initiatives, both Ingalls and Newport News performance was stable to slightly improving in the quarter as we continue to work through ships that were contracted prior to Pilavid. As I previously indicated, during the contract mix transition from pre-COVID contracts to our newly awarded contracts, we continue to expect some choppiness in performance.
The first operational initiative increasing throughput is showing improvement over 2024. Initial indications align with our expectation that the HII and Navy investments in workforce infrastructure and supply chain will have a positive impact on throughput trajectory. Our updated expectation is to achieve approximately 15% throughput improvement for the full year 2025 as throughput improvements have accelerated throughout the year.
From a labor perspective, we have hired over 4,600 shipbuilders year-to-date, and our retention rates have improved at both shipyards. At Newport News, we've seen an increase in experienced hires following the wage investment this summer and increased hiring from regional workforce development pipelines, which provides more proficient incoming shipbuilders. These are important steps to stabilize and level up the experience of our workforce.
Also, we are seeing success in expansion of the industrial base with our distributed shipbuilding strategy, resulting in significant outsourcing taking place at 23 partners and growing. With the Navy support, we are partnering with shipyards and fabricators in multiple states to grow throughput and improve schedule adherence for all of our shipbuilding programs.
The second operational initiative is our $250 million annualized cost reduction effort, and we remain on track to achieve this target. And the final operational initiative is achieving our new contract awards. Having completed the negotiations for the significant award of 2 submarines earlier this year, our teams have pivoted to negotiations of Block 6 and the next Columbia award and are working towards having agreements in place late this year.
Shifting to activities in Washington, the new fiscal year began with a lapse and appropriations. And as a result, many activities that the Federal government have halted. I will note in the Department of War shutdown guidance shipbuilding is 1 of 6 departmental priorities that should be supported to the extent possible with available funds.
To date, our programs in shipbuilding have been fully supported, and we've seen no impact to normal operations. We have had immaterial impact to Mission Technologies, but we're watching those programs closely as they are more likely to be impacted by budget timing. We continue to support completion of the FY '26 appropriations process as soon as possible to minimize the impact that a lapse in funding could have on our programs.
Both House and Senate Defense appropriations bills include critical funding to support the submarine and maritime industrial base. and both bills reflect continued investment in our shipbuilding programs with funding provided for the Columbia class and Virginia class submarine programs for CVN 80 and 81 construction and CVN 82 advanced procurement for the DDG 51 program and for the second of 3 years of funding for the refueling and overhaul of CVN 75.
We also look forward to Congress completing work on the fiscal year 2026 National Defense Authorization Bill qualifying the strong support for shipbuilding and other national security priorities reflected in the respective House and Senate bills. The 2 defense authorization committees continue to show strong support for our company's programs.
In summary, we had a solid third quarter with record sales as we ramp production in support of delivering on our commitments. And now I'll turn the call over to Tom for some remarks on our financial performance. Tom?
Thanks, Chris, and good morning. Let me start by briefly discussing our third quarter results, and then I'll address our outlook for the year. For more detail, please refer to the earnings release issued this morning and posted to our website. Beginning with our consolidated results on Slide 5 of the presentation, our third quarter revenues of approximately $3.2 billion were a record for HII and increased 16.1% compared to the same period last year. The higher revenue was attributable to strong year-over-year growth at all 3 divisions. Ingall's revenues were a record $828 million and increased by 24.7% compared to the third quarter of 2024, driven primarily by higher material volume and surface combatant. .
Newport News revenues of $1.6 billion increased by 14.5% compared to the third quarter of 2024, driven primarily by higher volumes across submarine and aircraft carrier programs. Together, shipbuilding revenue was $2.4 billion, well ahead of our guidance for the quarter as results benefited from higher-than-expected material receipt as well as the impacts of wage investments and our broader efforts to drive higher shipbuilding throughput, including increased outsourcing.
Mission Technologies revenues of $787 million increased by 11% compared to the third quarter of 2024, driven by higher volume ISR, cyber, electronic warfare, in space and live virtual and constructive training as well as our growth in unmanned systems. Moving on to Slide 6. I segment operating income of $179 million and segment operating margin of 5.6% in the third quarter of 2025 were both up from prior year results primarily driven by the prior year period's negative adjustments as well as the positive impacts of the volume growth I discussed. At Ingalls, segment operating income was $65 million and operating margin of 7.9% compared to $49 million and 7.4% in the third quarter of last year. The increases were driven by the volume increases in surface combatants.
The third quarter net cumulative adjustment at Angels was a positive $6 million, and none of the adjustments were individually in. At Newport News, segment operating income was $80 million and operating margin was 4.9% compared to $15 million and 1.1% in the third quarter of 2024.
Prior year results were impacted by negative adjustments resulting from the performance challenges and the delay of new contract awards. For the third quarter of 2025, Newport News Shipbuilding's net cumulative adjustment was negative $13 million,
None of the adjustments in the quarter were individually significant. Mission Technologies operating income and margin were largely consistent year-over-year as changes in the contract mix offset the higher volumes I previously mentioned. Consolidated operating income for the quarter was $161 million, and operating margin was 5% compared to $82 million and 3% in the same period last year.
The variance was primarily driven by the segment results I've just noted. Net earnings in the quarter were $145 million compared to $101 million in the third quarter of 2024. Diluted earnings per share in the quarter were $3.68 and compared to $2.56 in the same period last year.
The effective tax rate in the third quarter was 28.9%, higher than our initial expectations as results were impacted by a reduction in the estimated research and development tax credit for the prior year. Turning to Slide 7. Cash provided by operations was $118 million in the quarter.
Net capital expenditures were $102 million or 3.2% of revenues Free cash flow in the quarter was $16 million. Free cash flow results in the quarter better than the guidance we had provided, largely due to stronger collections in the quarter as well as some disbursements moving out of the quarter.
I'll discuss our updated 2025 free cash flow guidance in a moment. During the quarter, we did not repurchase any shares. We did pay a cash dividend of $1.35 per share or $53 million in the aggregate. Last week, we announced a modest increase in our quarterly dividend to $1.38 per share. Turning to liquidity and the balance sheet. We ended the quarter with a cash balance of $312 million and liquidity of approximately $2 billion.
Our capital allocation priorities are unchanged. We value our investment-grade credit rating, and we continue to prioritize prudent debt levels, while strategically investing in our shipyards and thoughtfully growing our dividend while continuing to use excess free cash flow for share repurchases.
Moving on to our outlook on Slide 8. We have narrowed the shipbuilding revenue range to be between $9 billion and $9.1 billion, which is an increase of $50 million at the midpoint from the prior guidance range. We are reiterating the shipbuilding margin range of between 5.5 and 6.5%. For Mission Technologies, we are now expecting revenue between $3 billion and $3.1 billion, an increase of $50 million from the prior guidance range.
At the midpoint, we expect Mission Technologies operating margins of approximately and EBITDA margins between 8% and 8.5%. Our 2025 guidance is predicated on achieving the operational initiatives we have laid out. We are pleased with the throughput improvement we saw in the third quarter. Though we have not been able to overcome the slower start to the year and therefore had to trim our throughput improvement expectation for the full year.
As Chris noted, we are continuing to work towards the Virginia Class Block 6 in Colombia Billt/Submarine awards later this year. If the award were to push into 2026, it would be a headwind to our guidance that would likely have us end the year slightly below the midpoint of our shipbuilding margin guidance range.
Conversely, an award this year would support us ending at or slightly above the midpoint of the range. For 2025 free cash flow, we are updating our guidance to be between $550 million and $650 million. At the midpoint, this is an increase of $50 million compared to our prior guidance range.
We are establishing a cumulative free cash flow target for 2025 and 2026 of $1.2 billion. Using the 2025 free cash flow guidance midpoint, this does imply both years will generate about $600 million in free cash flow. As always, our cash flow in a particular quarter or year can be impacted by small changes in timing large receipts and disbursements.
We're also updating a number of discrete income statement guidance elements. We have made some minor revisions to our pension outlook and you can find updated 2025 and 2026 expectations in the appendix of today's slide presentation. We are also updating the expected effective tax rate for the year to 22% given the elevated rate in the third quarter that I discussed previously.
To close, it was a good quarter as we continue to make steady progress working our way through challenging ships and executing our 2025 operational initiatives, securing new contracts aligned to the current environment, drive higher throughput and thoughtfully manage cost.
With that, I'll turn the call back over to Christie to manage Q&A.
Thanks, Tom. As a reminder to everyone on the call, please limit yourself to 1 initial question and 1 follow-up so we can get as many people through the queue as possible. Operator, I'll turn the call over to you to manage the Q&A. .
[Operator Instructions] Thank you very much. We will now open the Q&A session. [Operator Instructions] Our first question comes from Scott Mikus with Melius.
2. Question Answer
Chris and Tom. I wanted to ask . Virginia Block 6 and Columbia built 2 negotiations. You kind of touched on the fact that shipbuilding is not really impacted by the shutdown. Is there anything that's potentially holding up that negotiation maybe due to government employees being furloughed? And then also from a high-level perspective, does it make sense for industry and the customer to commit to that many boats at once -- or should the negotiation maybe split up into 2 or more negotiations to just get a better understanding of the cost and schedule to build those. .
Yes. Thanks, Scott. I think furlough is not impacting that negotiation. The team is working very hard to get that done. I won't comment directly on negotiations because it's inappropriate. But the team is working very hard to get that done before the end of the year. I know I also know the Navy is working on how that works with the shutdown and potential to make sure that we can get the ships awarded. So more to come there, but I think we're making good progress.
On the incremental award or potentially award less ships, really doesn't make sense. And contrary to really what we think is the most important thing for the industrial base, which is a consistent demand signal. And it's important as that is, to us, the supply chain really needs it. So I think incrementally, negotiating these rewarding these does not make a lot of sense. We need to get all 10 of these awarded and be on our way. So thanks, Scott. I appreciate it.
Okay. And then a quick one. It looks like you mentioned the retention rates have been improving. You had the wage increase going at Newport News, I think, in June. When is the wage increase going in at Ingalls?
Yes. So we're in discussions with the union at Ingalls that union agreement expires next year. So we're hoping to get that in place beaten next year, maybe end of this year, but we're in discussions. It makes it a bit more complicated because we engage with the union to get that done. .
Our next question comes from Noah Poponak with Goldman Sachs. Your line is now open. .
Tom, you highlighted the shipbuilding revenue in the quarter being almost $250 million ahead of your plan, but then only raising the full year by $50 million. And to be in the full year range, 4Q shipbuilding revenue would need to be flat, actually, maybe even down a little, and I think that compares pretty easy. Can you help me with that math? And I guess the bigger picture question is just seeing this very high growth rate in the quarter on shipbuilding revenue.
The question is, have you achieved much better ability to get the throughput relative to demand -- and can we extrapolate maybe it's not 16 every quarter for a while, but can we extrapolate much better growth in the medium term? Or was there something just with the outlay allocation or something kind of random to the quarter?
I appreciate the question, Noah. So a couple of things there. Newport News, they grew 15%, grew 25% from a Newport News perspective, what we saw there, increased throughput, wages and outsourcing. It was primarily driven by the material that we see on those contracts as well. And then from an Ingalls perspective, it was the material volume that we saw on the surface combined. A mixture of FY '23, the destroys the DG1000 and some growth on some only contracts we have and some orders on that front. .
I do expect we held the guidance right now. We took the bottom range up. We held the top range still, what we gave you at the beginning of the year there. There is some tailwinds, I'll tell you. So we want to see how we continue to improve. As Chris mentioned in his remarks upfront, it was earn throughput. Charleston Operations is providing a list in revenue. We've qualified over 23 new vendors on the outsourcing side.
So all that's very favorable. We want to continue to see a positive trend as we go forward here. I would say a couple of the dollars or pull ahead from Q4 to Q3, but there's some foundation and some substance there of increased growth as we go forward here. Chris and I will evaluate how Q4 plays out, and then we'll provide some guidance of revenue projections for shipbuilding on the February call. .
Yes. I think to add to that, Noah, obviously, I think 4% midterm growth is probably in the rearview mirror. But we want to make sure we roll up our plans and give you good guidance on the year-end call. .
Yes. I would comment to, if you pull back just even though Q3 was 18% growth that we had here, kind of year-over-year in shipbuilding. For the year itself, it's 6.1% between Q1, Q2 and Q3 here. So we do see some positive signs of the capacity -- and throughput, I envision as we continue to execute on the backlog we have. We have the book of business, the investments mature, the wages take hold and the workforce becomes more senior. I would envision that that's going to ramp as we go forward here. .
Chris, 4% is in the rearview mirror. What do you mean by that? .
Just long midterm guidance for shipbuilding. We have provided kind of midterm guidance for shipbuilding at 4%. .
What do you mean by it being in the rearview mirror? .
It's not -- probably not valid anymore. It's probably in excess of that. We just need to roll up our plans .
Okay. Understood. And then Tom or Chris, the $250 million cost initiative, it's -- it's a pretty big number just compared to your EBITDA base. Will that be a gross number? Do we need to net that number? And how much of that is already done and in your numbers versus is still ahead of you? .
Yes, it's all in our guidance. We assume we're going to achieve that in our guidance. So it's all in.
It's in your 2025 guidance? .
Yes. Yes. .
And has that been benefiting the margin year-to-date? .
Well, these are long-term contracts and you make assumptions about what the cost profile is going to be. So it's all been in our guidance. .
Our next question comes from Ron Epstein with Bank of America.. .
Yes. Thanks for the question. Yes. Just maybe a quick 1 here. Can you give us more color on your partnering strategy unmanned vessels you announced recently a partnership with Shield AI and the progress you're having on your own internal autonomy systems for these vehicles? .
Sure. Thanks for that. As you know, it's a odyssey software solution for autonomy. We've got the beauty of Odyssey, it's open source. So the implementation or incorporation of new software tools is pretty seamless. And so when we reviewed the space and opportunity we had to identify partners that could add capability into that software.
Shield AI made a lot of sense. C3I makes a lot of sense. It just makes it more powerful for the mission. We've been working on that software for a long time. As you know, we have over 750 vehicles that have been delivered, both the international and domestic partners. So it's been very positive.
And I don't know if you've seen the releases relative to rules line of vehicles that we're building as well. So Odyssey is a critical part of that. It only makes sense. It's part of MT's strategy to use world-class commercial solutions to make sure that we provide the best solutions for our customer and the open architecture of that software makes that pretty seamless. So we're excited about it. We think it's going to be a great tool, and we tend to include it going forward in our unmanned products.
Got it. Got it. And I mean, ultimately, how big do you think the unmanned market can be for you?
Yes. So I don't want to give a specific size. It is ramping. Is it becoming more material within Mission Technologies, and you see the budget environment, the allocation of additional unmanned opportunities in reconciliation is very positive. So it's ramping. I don't want to size it here, but it's definitely a place we're investing in .
Got it. Got it. And then maybe just 1 last one. You probably saw in the news yesterday, if you can't answer this, I mean it didn't happen that long ago. But the Trump administration suggested that hand wise going to be nuclear submarines at the Philadelphia Navy Yard. How has that changed things or not? I mean how do you think about that strategically? .
Well, it's definitely been an exciting couple of days in shipbuilding. I don't want to comment specifically on that because that's pretty new information. But at the end of the day, we're going to build what the Navy wants us to build we're going to partner with them and if they need our help, we're going to help them. So we're not getting distracted by anything. We're keeping our heads down, and we're going to build what's in front of us. But that's pretty new information. I don't want to comment directly on it until we understand more details. .
Our next question comes from Seth Seifman with JPMorgan.
So wanted to ask, I think, Tom, I think you mentioned with regard to the margin rate. If the contract didn't come in it'd be below the midpoint for the year, which I think would imply kind of a step down in the margin in Q4. And just kind of curious what drives that. Given where the underlying margins are in the in each shipyard after EACs, it would seem that the underlying margin here with kind of neutral ACs is something that is above 6% kind of in the maybe low towards mid-6 range.
And so is that some conservatism that leads you to have that guidance? Or is there some kind of anticipation or potential further negative adjustments?
I appreciate the question. Our shipbuilding margins for the first 3 quarters have been stable. We saw 6458 and 59 -- we're just tweaking the guidance on what will happen as we lay out in Q4. The 15 boat award will have incentives in there, some performance incentives, some capital incentives. Just the math of that is the timing of when that happens and how we book that. has incremental changes as we adopt the capital projects, the CapEx incentives and how we book that.
So we're probably being a little conservative on that front, and we're trying to guide the street as where we could land depending on the timing of those awards. Don't see some step backs right now through Q3, we've booked our performance or cost and schedule, and we're just reiterating the guide that we gave you at the beginning of the year for $55 to $65 million. But no issues or concerns expect to kind of finish up around the midpoint as we go forward here.
Our next question comes from Scott Deuschle with Deutsche Bank.
Chris, relative to that 15% throughput target, are you looking for a similar number from both Ingalls and Newport News? Or is that target materially different between the 2 yards? .
No, they actually are ending up at about the same place. So that doesn't often happen. But yes, they're ending up at about the same place. And it's pretty equally distributed between increased outsourcing and performance of the labor force. So yes, it's been pretty equal. .
Okay. And then relative to the reduction from the '20, was that also equal? Or did 1 of the yards see like slightly less improvement than than most expected. It sounds like fairly equal as well. So I'm just curious for that. .
Yes. Yes. Yes, fairly equal.
Okay. And then, Chris, after you raised the wages for your workers at Newport News, -- did you see any other local area industries respond in kind by also raising wages? I'm just trying to get a sense as to whether you're maintaining a consistent spread above the market wage rate as a result of those increases or if the market is also already eating into that at all? .
Yes. The market has not materially adjusted such that it's impacted our hiring and imports. It's been pretty positive at Newport News and the effect of those wages has been positive in reduced attrition but we're probably most excited about repositioning the experience level of the workforce, where we have more experience, but we're also hiring about 50% out of what we call the pipeline, which are the regional workforce development centers, the apprentice schools and the high school programs, which is very positive.
So Newport News labor is doing well, kind of cautiously optimistic, and we hope to keep it going.
Our next question comes from Myles Walton with Wolfe Research.
Tom, on cash flow -- on the cash flow flatness implied in 2026, maybe just give us a little bit of color there. Obviously, an assumption that earnings will grow CapEx, I would have thought maybe steps down a tad. Is there an offset to that to kind of keep in the flat range. And then a couple of years back, there was a bigger target for cash flow in the $700 million to $800 million range. Is that something that can only arrive with something like the saws being resolved?
I appreciate the question on that. Yes. So we brought back more than a guide an annual guide here 2-year guide. A piece of that is just with 5 quarters this quarter this year and next year as the awards come through, we watch performance for Q4, and then we set the trajectory for next year, we wanted to kind of settle the street on where we think we're going to be.
We've talked about the book of business we have, the performance where we stand. I think it's consistent that we'll have a run rate here of about $600 million between the 2 years. We'll just see what hits this year versus kind of next year between receipts and the awards. So I'm comfortable with that right now.
Relative to your math, yes, the revenue does grow here. There is a lot of moving parts in there between the working capital that CapEx and again, the timing of receipts and the performance for the next 5 quarters, that plays into all of that here. But generally speaking, there's -- I'm comfortable with where we're at. It's a conservative guide. I would tell you for 2026 as we go forward here.
I really want to close out the year lock on our plan, get the awards from the customer which has both opportunity R&Os around that, and then we'll give you more color to that in the February time frame.
Relative to your comment on the $700 million to $800 million, as we get back, obviously, the top line is growing, and that's good. We've kind of hinted here that the 4% has some good tailwinds and you see for the first 3 quarters of this year, it's over 6%. So we'll give you increased kind of guidance on that in the February time frame.
But the top line will grow kind of meaningfully. And the major piece that will change that cash flow inflection in the medium to long term will be the return of the profitability. We expect incremental profitability from year to year. And as we continue to retire the pre-COVID contract work, the new contracts are aligned with the efficiencies and the schedules and the materials that we see.
And as we get into those contracts, we start kind of booking more conservatively. But as we get into those contracts 3 to 5 years out, will see us getting back to more traditional expectations of profitability in shipbuilding. Obviously, higher top line, higher bottom line, and that's where we get back to the cash flows that you've kind of hinted here on the tail end of the decade here.
Got it. And then, Chris, maybe 1 for you, and I don't know if you can answer this 1 either, but the President has recently quoted saying he's going to have an executive order in aircraft carrier designs back to steam from emails. I'm just curious what carrier could that cut over into if that was actually a change that was going to take place? .
Yes. So again, I probably don't need to comment on that directly. What I will say is we're going to build whatever the Navy asks us to build. So if they ask us to code over malls or weapons elevators. We'll work with them to do it the most intelligent way and cut it over in the right way. But again, we're going to build what they ask us to build. .
Our next question comes from Gautam Khanna TD Cowen. [Operator Instructions]. Please go ahead. .
I was wondering if you could update us on a couple of things. One, did you receive the modules for CVN 80 that were delayed in the quarter? .
We did. We did. We -- and we will install those in Q4 and began to get back on the erection schedule for that both. So yes, we did receive the modules. .
Terrific. And could you give us the net EACs by segment? .
Yes. So the net EACs that we had here were gross favorable was 37%, unfavorable was 40, a net of minus 3%. That was made up of Ingalls positive, as I said in my remarks, and you put new at minus 13%. Those are in the remarks as well as NTIs.
Okay. Sorry, I missed that. And then I was just curious, Tom, on the Q4 implied shipbuilding EBIT, a pretty wide range, but you did mention that it's going to be somewhere around the midpoint with or without the submarine contracts signed. Is there the high end, is that like what would get you to the high end of the implied range and -- is there any reason to think that the extremes are actually in play.
Yes. I appreciate the question. We gave you that guide at the beginning of the year in February. We have reiterated in May and July now a year. We just have not changed that. I mean, the math at the extremes would take a lot of things break in 1 way or another way. I would stick to the comments I had earlier here. We've been very consistent from quarter-to-quarter. I don't really expect this to inflect significantly up or down from here for the end of the year. As I said earlier, I do expect as we go from year-to-year and incremental improvement here.
But we understand how we're operating. The performance has been really steady right now, and we're raising the focus and we had to do for the end of the year to close out within our guidance ranges that we gave.
Perfect. And 1 last one, Tom, just -- I know you talked about the pre-COVID and post-COVID contract mix. Can you remind us what it is this year and what do you expect it to be in 2026?
Yes. We haven't given specific percentages on that. But we've said that when we get to 2027, there will be there'll be more work post-COVID within pre-COVID be over 50%. So you can do the math of that of where we stand. But we're ramping from being in the '80s and 70s down to that 20 -- and it's fairly significant to retire those boats and ships. Every time we sell 1 off, obviously, there's less pre-COVID work and then the opportunity set is in front of us there with the new contracts aligned to performance and schedule and costs that we see here. .
Our next question comes from Noah Poponak with Goldman Sachs.. .
Just 1 follow-up on kind of everything happening here. Can you talk about why philosophically or mechanically and whether that's mechanically in the actual work or the nature of your contracting, why would the throughput and top line growth improve before faster than the margins? .
Yes, that's an interesting question. The throughput assumptions we have in our schedule support the EACs and we have risk and opportunity around them. So if we can execute on those throughput targets, then it mitigates a significant amount of risk and there's potential upside, but you have to evaluate each every quarter. It's not a perfectly aligned metric tied to margin performance.
Okay. Yes. Just sort of trying to better understand the much better top line and your confidence in that continuing with the shipbuilding margin being kind of just flat through the year. And I guess I would improve the labor, what I guess, would maybe immediately drive higher throughput, but then you need the labor to refine and get better before it impacts the margin, was maybe a thought or I didn't know if it's just the nature of percentage of completion accounting, which is sort of an interesting dynamic in the financials.
Yes. So yes, I think it's an interesting question. Tom can chime in here as well. But 1 quarter doesn't win the day, right, in an -- and you're running risk and opportunity throughout the entire program. So well, yes, you're retiring risk and if you're achieving your throughput targets and achieving your sales targets, you are retiring risk, but you aren't necessarily going to convert that into profitability in yours .
So perhaps 1 quarter is evidence of a start of everything you're doing, but you need more than that to put it in the actual booking rates? .
That's why I consider this a stable quarter. it's stable, but we need to continue to keep our head down and work. .
I comment on the back of that I'm with Chris, Dan. It's 13 weeks. Some of these contracts have 2 to 6 years to go. It's got actuals plus estimates to complete, and you put a quarter in the books at a solid quarter, which is good, expect that trend to continue, if not improve, but that wouldn't necessarily mean that immediately we changed the EACs.
Incrementally, we'll continue with good performance to retire down the risk. And as the cost risk kind of goes away, that's the catalyst to really take the booking rates up. So I like the trends that I'm seeing right now and quarter-over-quarter, as we continue to see that, that's what's going to drive the incremental improvement of the bottom line.
Yes. Yes, it's interesting. Appreciate the detail. .
I'm not showing any further questions at this time. I would now like to hand the call back over to Mr. Kastner for any connected remarks. .
Thank you for taking the time to join us today and for your interest in HII. At HII, we're committed to delivering on our strategic priorities and aim to drive growth and improve efficiency and create value for all our stakeholders. Please have a safe and happy Halloween weekend ahead.
Thank you very much. That concludes today's call. You may now disconnect your lines.
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Huntington Ingalls Industries — Q3 2025 Earnings Call
Huntington Ingalls Industries — Q3 2025 Earnings Call
📊 Quartal auf einen Blick
- Umsatz: $3,2 Mrd. (Rekord, +16,1% Jahr‑über‑Jahr)
- EPS: $3,68 (vs. $2,56 Vorjahr)
- Shipbuilding: $2,4 Mrd. Umsatz, +18% YoY; Ingalls $828M (+24,7%), Newport News $1,6Mrd (+14,5%)
- Auftragssituation: Q3 Aufträge $2 Mrd.; Backlog $56 Mrd. (davon $33 Mrd. finanziert)
- Cash & FCF: Operativer Cash $118M, FCF Q3 $16M; aktualisierte 2025‑FCF‑Guidance $550–650M; Kasse $312M, Liquidität ≈ $2 Mrd.
🎯 Was das Management sagt
- Durchsatz: Ziel ~15% Durchsatzverbesserung für 2025; positive Wirkung von Personalaufbau (4.600 Neueinstellungen YTD) und Outsourcing bei 23 Partnern
- Kapazitätsaufbau: Fokus auf Ausbau der maritimen Industrie‑Basis, Module für CVN‑80 erhalten, Virginia/Carrier‑Programme in Fahrt
- Mission Tech: Ausbau unbemannter Systeme und Autonomie durch Partnerschaften (Babcock, Shield AI, TELUS) und neue Produktfamilie (Romulus/Odyssey)
🔭 Ausblick & Guidance
- Shipbuilding: Umsatzrange $9,0–9,1 Mrd.; Marge 5,5–6,5% (Range beibehalten, Midpoint +$50M)
- Mission Tech: Umsatz $3,0–3,1 Mrd.; EBITDA‑Marge ~8–8,5%
- Cash‑Ziel: Kumulatives FCF‑Ziel 2025–2026 $1,2 Mrd. (impliziert ~600M/Jahr); effektiver Steuersatz 2025 jetzt ~22%
- Risikofaktor: Timing der Virginia/Columbia‑Awards — Verschiebung ins Jahr 2026 würde Margins/FCF leicht drücken
❓ Fragen der Analysten
- Submarine‑Awards: Frage nach Timing (Virginia Block 6 / Columbia build 2); Management: Verhandlungen laufen, Furloughs offenbar kein Hindernis, Ziel weiterhin Ende 2025
- Durchsatz vs. Marge: Warum Umsatz vor Margenerholung? Antwort: Durchsatzgewinne zeigen sich früh, EAC‑/Kostenwirkung braucht mehr Zeit und mehrere Quartale
- Kostensenkung: $250M Jahresziel bleibt im Guidance‑Baseline; Management sagt, Maßnahme ist in den Zahlen einkalkuliert
⚡ Bottom Line
- Kernergebnis: Rekordumsatz und klar sichtbare Produktionsverbesserung; Guidance wurde punktuell angehoben und FCF‑Ziel präzisiert. Hauptrisiko bleibt das Timing großer U‑Boot‑Awards; für Aktionäre bedeutet das: vorsichtig optimistischer Ausblick — stärkeres Umsatzwachstum und stabilere FCF‑Prognosen, aber kurzfristige Schwankungen abhängig von Vertragszeitpunkten.
Finanzdaten von Huntington Ingalls Industries
Umsatz
Der Umsatz stellt die Summe aller Einnahmen eines Unternehmens z. B. für dessen Produkte oder Dienstleistungen dar.
Umsatz (TTM) einfach erklärtDirekte Kosten
Direkte Kosten sind die Kosten, die direkt im Zusammenhang mit der Herstellung des Produkts oder der Dienstleistung entstehen.
Bruttoertrag
Der Bruttoertrag gibt an, wie viel vom Umsatz nach Abzug der direkten Herstellkosten im Unternehmen verbleibt. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der Bruttomarge (engl. Gross Margin).
Brutto Marge einfach erklärtVertriebs- und Verwaltungskosten
Die Vertriebs- & Verwaltungskosten (engl. Selling, General & Administrative expenses, kurz SG&A) beinhalten alle Aufwände für Marketing und den Verkauf sowie die allgemeine Verwaltung des Unternehmens.
Forschungs- und Entwicklungskosten
Die Forschungs- und Entwicklungskosten (engl. research & development costs, kurz R&D) geben Auskunft darüber, wie viel das Unternehmen in die Forschung und die Entwicklung seiner Produkte investiert. Vor allem prozentual vom Umsatz und im Vergleich zu direkten Wettbewerbern sind die Kosten interessant.
EBITDA
Das EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) ist der Gewinn des Unternehmens vor Zinsen, Steuern und Abschreibungen. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der EBITDA-Marge.
Abschreibungen
Abschreibungen stellen Wertminderungen von Vermögensgegenständen des Unternehmens dar (z.B. durch Abnutzung von Maschinen).
EBIT (Operatives Ergebnis)
Das EBIT (engl. Earnings Before Interest and Taxes) ist der Gewinn des Unternehmens vor Zinsen und Steuern, das auch als operatives Ergebnis bezeichnet wird. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von
der EBIT-Marge.
Nettogewinn
Der Nettogewinn stellt den Gewinn oder Verlust nach Abzug aller Kosten dar.
Nettogewinn einfach erklärtaktien.guide Premium
| Jun '26 |
+/-
%
|
||
| Umsatz | 13.185 13.185 |
14 %
14 %
100 %
|
|
| - Direkte Kosten | 11.550 11.550 |
14 %
14 %
88 %
|
|
| Bruttoertrag | 1.635 1.635 |
14 %
14 %
12 %
|
|
| - Vertriebs- und Verwaltungskosten | 990 990 |
2 %
2 %
8 %
|
|
| - Forschungs- und Entwicklungskosten | - - |
-
-
|
|
| EBITDA | 969 969 |
22 %
22 %
7 %
|
|
| - Abschreibungen | 322 322 |
2 %
2 %
2 %
|
|
| EBIT (Operatives Ergebnis) EBIT | 647 647 |
38 %
38 %
5 %
|
|
| Nettogewinn | 661 661 |
26 %
26 %
5 %
|
|
Angaben in Millionen USD.
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Huntington Ingalls Industries Aktie News
Firmenprofil
Huntington Ingalls Industries, Inc. ist im Schiffbaugeschäft tätig. Sie ist in den folgenden Geschäftsbereichen tätig: Ingalls, Newport News und Technische Lösungen. Das Segment Ingalls entwickelt und baut nicht-nukleare Schiffe, Angriffsschiffe und Überwasserschiffe. Das Segment Newport News entwirft, baut und wartet nuklearbetriebene Schiffe, darunter Flugzeugträger und U-Boote. Das Segment Technische Lösungen bietet professionelle Dienstleistungen an, darunter Flottenunterstützung, integrierte Missionslösungen, Nuklear- und Umweltdienste sowie Öl- und Gasdienste. Das Unternehmen wurde am 4. August 2010 gegründet und hat seinen Hauptsitz in Newport News, VA.
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| Hauptsitz | USA |
| CEO | Mr. Kastner |
| Mitarbeiter | 44.000 |
| Gegründet | 2010 |
| Webseite | hii.com |


