Huntington Ingalls Industries Inc (HII) Q3 2024 Earnings Call Highlights: Navigating Challenges ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $2.7 billion for the third quarter, a decrease of 2.4% compared to the same period last year.

  • Earnings Per Share (EPS): $2.56, down from $3.70 a year ago.

  • Operating Income: $82 million, a decrease of 52.3% from the third quarter of 2023.

  • Operating Margin: 3% for the quarter, compared to 6.1% in the same period last year.

  • Net Earnings: $101 million, compared to $148 million in the third quarter of 2023.

  • Backlog: $49.4 billion at the end of the quarter.

  • Shipbuilding Revenue Guidance: Updated to approximately $8.8 billion for the full year.

  • Mission Technology Revenue Guidance: Updated to a range of $2.8 billion to $2.85 billion.

  • Shipbuilding Margin Guidance: Updated to 5% to 6% for 2024.

  • Free Cash Flow Guidance: Revised to $0 to $100 million for 2024.

  • Mission Technologies Revenue Growth: 14% year-to-date over 2023.

  • Contract Awards: $11 billion of potential contract value in the third quarter for Mission Technologies.

  • Capital Expenditures: Reduced to 3.4% of sales for the year.

  • Dividend Increase: Quarterly dividend increased to $1.35 per share, a 3.8% increase.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Huntington Ingalls Industries Inc (NYSE:HII) reported third quarter revenue of $2.7 billion, showcasing strong performance in its Mission Technologies division with 14% revenue growth year-to-date over 2023.

  • The company secured significant contract wins in the third quarter, totaling $11 billion in potential contract value, including a $6.7 billion contract with the US Air Force.

  • HII's Mission Technologies division achieved a third quarter funded book-to-bill ratio of 2.2, indicating strong demand and future revenue potential.

  • The company received a $9.6 billion award for the multi-ship procurement of amphibious warships, providing strong revenue visibility for years to come.

  • HII ended the third quarter with a backlog of $49.4 billion, of which approximately $28 billion is currently funded, ensuring long-term revenue stability.

Negative Points

  • Huntington Ingalls Industries Inc (NYSE:HII) reported a decrease in third quarter earnings per share to $2.56, down from $3.70 a year ago, indicating a decline in profitability.

  • The company faced challenges with late critical material deliveries and reduced experience levels within its teams, leading to labor inefficiency and rework.

  • HII's shipbuilding operating margin guidance for 2024 was revised down to 5% to 6%, reflecting ongoing performance challenges and cost pressures.

  • The company updated its 2024 free cash flow guidance to a range of $0 to $100 million, significantly lower than previous expectations.

  • HII is experiencing delays and cost increases on ships negotiated prior to COVID, which did not anticipate the significant disruption of the workforce and supply chain or subsequent inflation.

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