NYSE$HII

Huntington Ingalls Industries Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

HII reported third quarter results with revenue increase primarily driven by the acquisition of Alion and growth at Newport News Shipbuilding.

HII's third quarter 2022 revenues reached $2.6 billion, a 12.3% increase from Q3 2021, driven by the Alion acquisition and growth at Newport News Shipbuilding. The company reported net earnings of $138 million, or $3.44 diluted earnings per share. HII narrows FY22 revenue guidance ranges, reaffirms shipbuilding operating margin guidance, revises Mission Technologies operating margin guidance, increases FY22 free cash flow guidance and updates for current R&D tax treatment.

  • Revenues were $2.6 billion in the quarter.
  • Net earnings of $138 million or $3.44 diluted earnings per share.
  • Narrows FY22 revenue guidance ranges.
  • Total backlog to approximately $46.7 billion as of September 30, 2022.

Headline financials

Total Revenue

$2.63B

Previous: $2.34B+12.3%
EPS (adj)

$3.44

Previous: $3.65-5.8%
Capital Expenditures

-$179M

Previous: -$216M+17.1%
Free Cash Flow

-$41M

Previous: -$69M+40.6%
Net Income

$138M

Previous: $147M-6.1%
Operating Income

$131M

Previous: $118M+11.0%
Gross Profit

$2.63B

Previous: $2.34B+12.3%
Cash & Equivalents

$117M

Previous: $555M-78.9%
Total Assets

$10.6B

Previous: $10.4B+2.1%
Stock-Based Comp

$12M

Previous: $7M+71.4%

Revenue & EPS history

Huntington Ingalls · Revenue · Quarterly

$2.63B

Q3 2022+12.3%vs Q3 2021
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Revenue by segment

Huntington Ingalls · $2.66B total across 3 segments · Q3 2022

  • Newport News Shipbuilding
    $1.45B+6.7%
  • Ingalls Shipbuilding
    $623M-0.8%
  • Mission Technologies
    $595M+51.0%

Forward guidance

HII expects FY22 revenue at lower end of previous guidance ranges given challenging labor environment and timing of material delivery. Expects FY22 shipbuilding revenue between $8.2 and $8.3 billion, shipbuilding operating margin between 8.0% and 8.1%. Expects FY22 Mission Technologies revenue of approximately $2.4 billion, segment operating margin of approximately 2.3%; and Mission Technologies EBITDA margin of approximately 8.3%. Expects FY22 free cash flow of approximately $350 million based on current tax law.

Tailwinds

  • Shipbuilding revenue between $8.2B and $8.3B
  • Shipbuilding Operating Margin between 8.0% and 8.1%
  • Mission Technologies Revenue of approximately $2.4B
  • Mission Technologies EBITDA Margin of approximately 8.3%
  • Free Cash Flow of approximately $350M

Headwinds

  • Challenging labor environment
  • Timing of material delivery
  • Mission Technologies Segment Operating Margin of approximately 2.3%
  • Interest Expense of ($106M)
  • Non-current State Income Tax Expense ($5M)

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 Q3 2022

Historical avgQ3 2022

-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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