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Mar 31, 2020
Huntington Ingalls Q1 2020 Earnings Report
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.
Key Takeaways
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.
Revenue by Segment
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.
Positive Outlook
- 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
Challenges Ahead
- 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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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