Financial Data and Key Metrics Changes - In Q4 2024, consolidated revenues were $3 billion, a decrease of approximately 5% year-over-year, driven by lower revenues across all segments [31] - For the full year 2024, revenues totaled $11.5 billion, an increase of $81 million or approximately 1% compared to 2023, primarily due to higher volumes at Mission Technologies [37] - Net earnings for Q4 2024 were $123 million, down from $274 million in the same quarter last year, with diluted earnings per share at $3.15 compared to $6.90 [36] - Full-year net earnings were $550 million, compared to $681 million in 2023, with diluted earnings per share at $13.96, down from $17.07 [44] Business Line Data and Key Metrics Changes - Mission Technologies achieved revenues of $713 million in Q4 2024, a decrease of 4.3% year-over-year, primarily due to lower volumes in C5ISR [32] - For the full year, Mission Technologies revenues were $2.9 billion, an increase of 8.8% from 2023, driven by higher volumes in cyber, electronic warfare, and space contracts [38] - Ingalls revenues for 2024 were $2.8 billion, a slight increase of 0.5% from 2023, while Newport News revenues decreased by 2.7% to $6 billion [38] Market Data and Key Metrics Changes - The year-end backlog was $49 billion, with $27 billion funded, and 2024 contract awards totaled $12 billion [10] - The company expects to secure over $50 billion in contract awards over the next 24 months, indicating strong demand for its products and services [6][28] Company Strategy and Development Direction - The company aims to grow to $15 billion in annual revenue by 2030, with associated margin expansion and free cash flow growth [9] - Operational initiatives include a target of $250 million in annual cost reductions and a focus on increasing throughput and workforce stability [22][21] - The company plans to increase outsourcing by 30% in 2025 to address critical skill gaps within its shipyards [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving historical margin levels of 9% to 10% in the future, citing ongoing negotiations for new contracts that include inflation protection [66][68] - The company anticipates that the majority of its revenue by 2027 will come from contracts reflecting the current operating environment, which should facilitate margin improvement [52] Other Important Information - The company completed significant milestones in shipbuilding, including the delivery of submarines and aircraft carriers, and expects to deliver five ships over the next two years [28] - The Defense Authorization Act for fiscal year 2025 supports the company's shipbuilding programs, authorizing funding for multiple vessels [26] Q&A Session Summary Question: Margin outlook and inflation impact - Management acknowledged the challenges of inflation on margins but expressed belief that achieving 9% margins is possible with new contracts that include inflation protection [60][66] Question: Contract awards and guidance assumptions - The guidance assumes contract awards for FY24 and negotiations for Block 5 and Columbia contracts, with confidence in securing these contracts [76][81] Question: Lessons from past performance and EAC improvements - Management highlighted the importance of transparency and accurate cost estimates in negotiations, with expectations for improved profitability as pre-COVID contracts are phased out [88][99] Question: Shipbuilding margin guidance - Management indicated that the guidance reflects a conservative approach, considering recent negative adjustments, but expects gradual improvements in margins over time [155][156] Question: Hiring plans and shipyard capacity - The company plans to maintain hiring levels while focusing on experienced personnel, with no immediate plans to acquire additional shipyards [120][123] Question: Free cash flow expectations - Management expects free cash flow to improve as pre-COVID contracts run off, with a return to more normalized levels anticipated in the coming years [129][132]

Military shipbuilder Huntington Ingalls (HII -16.84%) missed quarterly expectations, and its issues are likely to continue into the new year.Shares of Huntington Ingalls traded down 17% as of 11:15 a.m. ET, as investors see little reason to get excited about the stock right now.It's tough to turn a battleshipHuntington Ingalls is one of two major shipbuilders for the military, and its massive Newport News, Virginia, shipyard is responsible for producing the nation's aircraft carriers and other important ves ...

Defense Budget and Market Conditions - The U.S. defense budget is under pressure, which may impact funding for individual programs and delay customer payments[89] - Competition in the shipbuilding market is intense, with potential reductions in U.S. defense spending increasing exposure to market competition risk[99] - Military conflicts, such as those involving Russia and Ukraine, have led to increased security assistance, potentially shifting defense budget priorities[89] - Changes in Department of Defense (DoD) business practices may affect procurement processes and impact current programs and potential new awards[95] - The DoD is accelerating the development and acquisition of new technologies through rapid acquisition alternatives, which may affect strategic business opportunities[96] Contractual and Financial Risks - Approximately 48% of revenues in 2024 were generated under fixed-price incentive contracts, with 47% from cost-type contracts, indicating a significant reliance on these contract types[108] - Cost overruns have adversely impacted results of operations, particularly under fixed-price contracts, which increase financial risk due to inflation and labor shortages[111] - Changes in estimates used in contract accounting have affected profitability and may continue to do so, depending on various risk factors[92] - The company has experienced a higher number of audits due to cost recovery initiatives, which could adversely affect financial position and cash flows[97] - The company's earnings and profitability are dependent on subcontractor performance and the availability and pricing of raw materials, which can lead to unexpected cost growth[116] - The company relies on sole source suppliers for certain components, which poses risks to contract obligations if these suppliers fail to deliver[119] - Future success depends on increasing shipbuilding capacity, which may involve investments, partnerships, and hiring qualified personnel[121] - The company faces risks associated with innovative designs and new technologies, which can lead to delays and increased costs in contract performance[122] Workforce and Talent Management - The company faces challenges in recruiting and retaining qualified personnel, which may negatively impact business performance[113] - A significant portion of the current workforce is nearing retirement, impacting the ability to maintain performance on long-term contracts and potentially leading to inefficiencies[114] - Increased competition for talent has resulted in higher labor, recruiting, and training costs, negatively affecting financial results and cash flow[115] Cybersecurity and Regulatory Risks - Cybersecurity threats pose significant risks to the company's operations, potentially leading to financial losses and reputational damage[131] - The use of artificial intelligence presents inherent risks, including operational inefficiencies and potential legal liabilities if not managed properly[137] - Evolving regulations surrounding AI may require the company to adjust operations and could introduce additional legal and operational risks[139] Environmental and Legal Compliance - The company may incur significant costs related to compliance with environmental laws and regulations, which could adversely affect its financial position and cash flows[155] - The company is subject to various legal proceedings that could result in fines, penalties, or other damages, potentially impacting its financial results[154] - Environmental costs related to hazardous materials and compliance with regulations could have a material adverse effect on the company's financial position[156] - Disruptions caused by natural disasters and environmental events could materially affect the company's financial position and results of operations[141] Financial Performance and Position - Total sales and service revenues for 2024 were $11,535 million, a slight increase of 0.7% compared to $11,454 million in 2023[357] - Product sales decreased to $7,464 million in 2024 from $7,664 million in 2023, representing a decline of 2.6%[357] - Service revenues increased to $4,071 million in 2024, up 7.4% from $3,790 million in 2023[357] - Operating income for 2024 was $535 million, down 31.5% from $781 million in 2023[357] - Net earnings for 2024 were $550 million, a decrease of 19.2% compared to $681 million in 2023[357] - Basic earnings per share for 2024 were $13.96, down from $17.07 in 2023, reflecting a decline of 18.4%[357] - Cash and cash equivalents increased significantly to $831 million in 2024 from $430 million in 2023, marking a growth of 93.5%[359] - Total assets rose to $12,141 million in 2024, an increase of 8.2% from $11,215 million in 2023[359] - The company reported a comprehensive income of $944 million for 2024, an increase of 10% from $858 million in 2023[357] Liabilities and Capital Management - Total current liabilities decreased to $2,991 million in 2024 from $3,032 million in 2023, a reduction of 1.4%[361] - Long-term debt increased to $2,700 million in 2024, up from $2,214 million in 2023, representing a 21.9% increase[361] - Total liabilities increased to $7,475 million in 2024, up from $7,122 million in 2023, a rise of 4.9%[361] - The company has a $1.7 billion credit facility and a $1.7 billion commercial paper program, with no indebtedness outstanding as of December 31, 2024[337] Shareholder Returns and Dividends - Dividends declared increased to $5.25 per share in 2024, up from $5.02 per share in 2023[365] - The quarterly cash dividend was increased from $1.30 per share to $1.35 per share in November 2024, with total cash dividends paid of $206 million in 2024[428] - The company's ability to pay dividends or repurchase shares is subject to limitations and the discretion of the board of directors[182] Segment Performance and Revenue Recognition - The company has three reportable segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Mission Technologies, focusing on defense and naval shipbuilding[369] - Revenue recognition for shipbuilding contracts is based on a cost-to-cost input method, reflecting performance progress over time[439] - The Mission Technologies segment also derives most of its revenue from U.S. Government contracts, structured as either IDIQ or standalone contracts[440] - Contract modifications due to unpriced change orders are routinely made and accounted for as contract modifications when approved[437] - The company invoices and receives payments based on performance progress, typically no less frequently than monthly[435]

Huntington Ingalls Industries, Inc.’s (HII) fourth-quarter 2024 earnings of $3.15 per share declined 54.3% from $6.90 in the prior-year quarter. The bottom line also missed the Zacks Consensus Estimate of $3.28 by 4%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The year-over-year decline can be attributed to poor sales as well as operating income in the fourth quarter of 2024 compared with fourth-quarter 2023. For 2024, the company registered earnings of $13.96 per share, which mis ...

Huntington Ingalls (HII) reported $3 billion in revenue for the quarter ended December 2024, representing a year-over-year decline of 5.5%. EPS of $3.15 for the same period compares to $6.90 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $3.03 billion, representing a surprise of -0.88%. The company delivered an EPS surprise of -3.96%, with the consensus EPS estimate being $3.28.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- an ...

Huntington Ingalls (HII) came out with quarterly earnings of $3.15 per share, missing the Zacks Consensus Estimate of $3.28 per share. This compares to earnings of $6.90 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.96%. A quarter ago, it was expected that this shipbuilder would post earnings of $3.84 per share when it actually produced earnings of $2.56, delivering a surprise of -33.33%.Over the last four quarters, the c ...

Q4 2024 Earnings Call Chris Kastner President and CEO Tom Stiehle EVP and CFO February 6, 2025 Cautionary Statement Regarding Forward-looking Statements Statements in this presentation and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words suc ...

Revenues were $3.0 billion in the fourth quarter, $11.5 billion in 2024Diluted earnings per share was $3.15 in the fourth quarter, $13.96 in 2024Backlog of $48.7 billion at year-endAchieved critical shipbuilding milestones in 2024, including delivery of Virginia-class submarine New Jersey (SSN 796) and amphibious transport dock Richard M. McCool Jr. (LPD 29)Mission Technologies secured awards with total contract value of over $12 billion in 2024 NEWPORT NEWS, Va., Feb. 06, 2025 (GLOBE NEWSWIRE) -- HII (NYSE ...

Financial Performance - Fourth quarter 2024 revenues were $3.0 billion, a decrease of 5.4% from $3.2 billion in the fourth quarter of 2023[2] - Diluted earnings per share for the fourth quarter was $3.15, down 54.3% from $6.90 in the same period last year[4] - Full year 2024 revenues totaled $11.5 billion, an increase of less than 1% compared to 2023[4] - The company reported net earnings of $123 million for the three months ended December 31, 2024, compared to $274 million for the same period in 2023[33] - Basic earnings per share for the year ended December 31, 2024, was $3.15, down from $6.90 in 2023[33] - Net earnings for 2024 were $550 million, down from $681 million in 2023, a decrease of 19.2%[35] - Segment operating income for the fourth quarter was $110 million, a decline of 64.7% from $312 million in the fourth quarter of 2023[3] - Segment operating income for the year ended December 31, 2024, was $573 million, down from $842 million in 2023, a decrease of 32%[47] Revenue Breakdown - Newport News Shipbuilding revenues for the fourth quarter were $1.6 billion, a decrease of 4.6% from the prior year[15] - Mission Technologies achieved revenues of $713 million in the fourth quarter, down 4.3% from 745 million in the same period last year[19] - Mission Technologies revenues for the year ended December 31, 2024, increased to $2,937 million, up 8.8% from $2,699 million in 2023[49] - Shipbuilding revenue for 2024 was $11,535 million, slightly up from $11,454 million in 2023, an increase of 0.7%[47] Cash Flow and Capital Expenditures - Full year 2024 net cash provided by operating activities was $393 million, significantly lower than $970 million in 2023[6] - For the three months ended December 31, 2024, net cash provided by operating activities was $391 million, down from $562 million in the same period of 2023[48] - Free cash flow for FY25 is anticipated to be between $300 million and $500 million[27] - Free cash flow for the three months ended December 31, 2024, was $277 million, a decrease of 36.2% compared to $434 million in the same period of 2023[48] - Capital expenditures increased to $367 million in 2024 from $292 million in 2023, an increase of 25.7%[35] - Capital expenditures for the year ended December 31, 2024, totaled $367 million, an increase from $292 million in 2023[48] - Grant proceeds for capital expenditures in 2024 were $14 million, consistent with the previous year[48] Contracts and Awards - The backlog at year-end 2024 was approximately $48.7 billion, supported by new contract awards of approximately $12.1 billion during the year[9] - Awarded a $6.7 billion contract for electronic warfare engineering and technical services support for the U.S. Air Force[22] - Awarded a $3 billion Federal Government task order for national security services and new and emerging technology[22] - Awarded a $458 million contract to modernize communications and IT networks for the U.S. Department of Defense[22] - Mission Technologies secured total contract value awards exceeding $12 billion in 2024[7] Dividends and Shareholder Returns - Declared dividends of $1.35 per share for the three months ended December 31, 2024, compared to $1.30 in 2023[33] - Dividends paid in 2024 were $206 million, compared to $200 million in 2023, an increase of 3%[35] Future Projections - FY25 shipbuilding revenue is projected to be between $8.9 billion and $9.1 billion, with an operating margin of 5.5% to 6.5%[25] - FY25 Mission Technologies revenue is expected to be between $2.9 billion and $3.1 billion, with an operating margin of 4.0% to 4.5% and an EBITDA margin of 8.0% to 8.5%[27] - The company has a mid to long-term revenue growth expectation of over 4%[27] Asset and Liability Overview - Total assets increased to $12,141 million in 2024 from $11,215 million in 2023, representing a growth of 8.2%[34] - Total liabilities increased to $7,475 million in 2024 from $7,122 million in 2023, an increase of 4.9%[34] - Cash and cash equivalents rose to $831 million in 2024, compared to $430 million in 2023, an increase of 93.5%[35] Mission Technologies Performance - Mission Technologies segment operating income for the year ended December 31, 2024, was $116 million, reflecting a 14.9% increase from $101 million in 2023[49] - Mission Technologies EBITDA for the year ended December 31, 2024, was $233 million, slightly up from $232 million in 2023[49] - The EBITDA margin for Mission Technologies for the year ended December 31, 2024, was 7.9%, compared to 8.6% in 2023[49] - The depreciation expense for Mission Technologies for the year ended December 31, 2024, was $11 million, unchanged from 2023[49] - The amortization expense for Mission Technologies decreased to $99 million in 2024 from $109 million in 2023[49]

Wall Street analysts forecast that Huntington Ingalls (HII) will report quarterly earnings of $3.28 per share in its upcoming release, pointing to a year-over-year decline of 52.5%. It is anticipated that revenues will amount to $3.03 billion, exhibiting a decline of 4.6% compared to the year-ago quarter.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this t ...