NYSE$HII

Huntington Ingalls Industries Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Huntington Ingalls reported first quarter revenues of $2.3 billion, an 8.8% increase from the first quarter of 2019, with a diluted earnings per share of $4.23 and a backlog of $45.2 billion.

Huntington Ingalls Industries reported strong first-quarter results with revenue growth driven by higher volume at Newport News and Ingalls shipbuilding divisions, as well as growth at the Technical Solutions division. The company's operating margin improved due to a favorable operating FAS/CAS adjustment and higher risk retirement at both Newport News and Ingalls shipbuilding divisions. The company maintains a substantial backlog and reiterates long-term financial targets.

  • Revenues increased by 8.8% to $2.3 billion, driven by higher volume at Newport News and Ingalls shipbuilding divisions, as well as growth at HII’s Technical Solutions division.
  • Operating income increased to $215 million, with an operating margin of 9.5%, primarily due to a more favorable operating FAS/CAS adjustment and higher risk retirement at Newport News and Ingalls shipbuilding divisions.
  • Diluted earnings per share increased to $4.23, compared to $2.85 in the same period of 2019.
  • Backlog totaled approximately $45.2 billion as of March 31, 2020.

Headline financials

Total Revenue

$2.26B

Previous: $2.08B+8.8%
EPS (adj)

$4.23

Previous: $2.85+48.4%
Capital Expenditures

-$71M

Previous: -$110M+35.5%
Free Cash Flow

$101M

Previous: $8M+1162.5%
Net Income

$172M

Previous: $118M+45.8%
Operating Income

$215M

Previous: $161M+33.5%
Gross Profit

$2.26B

Previous: $2.08B+8.8%
Cash & Equivalents

$28M

Previous: $51M-45.1%
Total Assets

$7.62B

Previous: $7B+8.8%
Stock-Based Comp

$7M

Previous: $5M+40.0%

Revenue & EPS history

Huntington Ingalls · Revenue · Quarterly

$2.26B

Q1 2020+8.8%vs Q1 2019
Beat estimate in 9 of 16 quarters(56%)
ActualEstimate

Revenue by segment

Huntington Ingalls · $2.29B total across 3 segments · Q1 2020

  • Newport News Shipbuilding
    $1.34B+4.8%
  • Ingalls Shipbuilding
    $629M+7.7%
  • Mission Technologies
    $317M+32.1%

Forward guidance

Huntington Ingalls Industries anticipates shipbuilding revenue growth for the year to be at the lower end of the previously provided range of 3 to 5 percent due to reduced attendance in the shipyards. No change to long-term financial targets provided at February 2020 Investor Day.

Tailwinds

  • Strong pre-COVID balance sheet bolstered by recent actions
  • $1B in proceeds from new senior notes offering
  • $500M new revolving credit facility
  • Company remains confident in its ability to minimize the impact of COVID-19 on its business
  • Company to achieve the long-term financial targets provided in February

Headwinds

  • COVID-19 impact on fiscal year 2020 financial results and beyond is uncertain.
  • Intensity and duration of the impact on employees’ ability to work effectively.
  • Disruption in supply chain.
  • Disruption of the U.S. Government's and our other customers' abilities to perform their obligations.
  • Impact on pension assets and other investment performance.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-0.6%

Avg return

Earnings day

-2.3%

Avg return

5 days after

-1.1%

Avg return

30 days after

52%

33 / 64 earnings

Positive

+10.1%

Q4 2017

Best reaction

-24.5%

Q3 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.6%-13.0%-19.4%
Q4 2025-10.6%-3.3%+3.9%
Q3 2025+7.0%+5.9%+5.1%
Q1 2025-1.2%+1.1%-3.2%
Q4 2024-18.3%-14.2%+0.2%
Q3 2024-24.5%-22.9%-21.0%
Q2 2024-5.9%-8.4%+1.0%
Q1 2024-11.1%-10.3%-8.6%
Q4 2023+3.7%+2.8%+13.0%
Q3 2023+5.9%+5.1%+8.0%
Q2 2023-0.4%-0.8%-3.1%
Q1 2023+0.3%-1.2%+5.4%
Q4 2022-1.9%-4.2%-7.9%
Q3 2022-3.9%-3.6%-5.2%
Q2 2022+4.1%+3.1%+3.7%
Q1 2022-2.7%-5.6%-4.2%
Q4 2021-1.8%-3.8%+10.1%
Q3 2021-3.0%-2.6%-9.4%
Q2 2021+2.6%+3.3%+1.4%
Q1 2021+1.9%+0.9%+4.4%
Q4 2020+5.0%+4.4%+16.3%
Q3 2020+1.3%+7.2%+11.3%
Q2 2020-6.0%-5.7%-17.4%
Q1 2020+1.1%-2.9%+13.4%
Q4 2019-8.8%-12.1%-33.9%
Q3 2019+7.4%+8.5%+8.3%
Q2 2019-9.7%-9.7%-8.5%
Q1 2019-5.0%-6.5%-8.1%
Q4 2018+1.7%+0.9%-5.4%
Q3 2018-4.5%-8.9%-15.2%
Q2 2018+2.8%+1.8%+6.5%
Q1 2018-9.1%-4.3%-3.7%
Q4 2017+10.1%+10.2%+5.3%
Q3 2017+3.9%+2.5%+1.6%
Q2 2017+2.8%+2.8%+3.3%
Q1 2017-2.8%-2.5%-3.6%
Q4 2016+3.0%+3.4%+3.9%
Q3 2016-8.3%-6.0%+13.1%
Q2 2016-2.4%-2.8%-4.2%
Q1 2016+6.9%
Q4 2015-1.4%
Q3 2015+7.2%
Q2 2015-1.1%
Q1 2015-11.2%
Q4 2014+7.2%
Q3 2014+1.8%
Q2 2014+6.1%
Q1 2014-3.4%
Q4 2013+4.6%
Q3 2013+4.7%
Q2 2013+0.5%
Q1 2013-0.6%
Q4 2012+5.7%
Q3 2012-0.0%
Q2 2012+6.6%
Q1 2011-6.8%
Q1 2012-1.5%
Q4 2009-0.5%
Q4 2011-0.5%
Q3 2010+4.7%
Q3 2011+4.7%
Q2 2011+0.0%
Q4 2010+0.0%
Q2 2010+0.0%
Q1 2010

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