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Huntington Ingalls
🇺🇸 NYSE:HII
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Jun 30, 2020

Huntington Ingalls Q2 2020 Earnings Report

Huntington Ingalls Industries' performance was impacted by COVID-19 and program adjustments, resulting in decreased revenues and earnings compared to the previous year.

Key Takeaways

Huntington Ingalls Industries reported a decrease in revenues and operating income for the second quarter of 2020, primarily due to unfavorable cumulative catch-up adjustments and COVID-19 related impacts. Despite these challenges, new contract awards were approximately $2.9 billion, bringing total backlog to approximately $46.1 billion.

Revenues decreased by 7.4% to $2.0 billion due to unfavorable cumulative catch-up adjustments and COVID-19 impacts.

Operating income significantly decreased to $57 million, with an operating margin of 2.8%.

Diluted earnings per share was $1.30, a decrease from $3.07 in the same period of 2019.

New contract awards in the quarter were approximately $2.9 billion, resulting in a total backlog of $46.1 billion.

Total Revenue
$2.03B
Previous year: $2.19B
-7.4%
EPS
$1.3
Previous year: $3.07
-57.7%
Total Backlog
$46.1B
Gross Profit
$264M
Previous year: $354M
-25.4%
Cash and Equivalents
$631M
Previous year: $29M
+2075.9%
Free Cash Flow
$126M
Previous year: -$168M
-175.0%
Total Assets
$8.23B
Previous year: $7.23B
+13.9%

Huntington Ingalls

Huntington Ingalls

Huntington Ingalls Revenue by Segment

Forward Guidance

Huntington Ingalls Industries revised its 2020 outlook to reflect updated cost and schedule assumptions across its programs, taking into account the ongoing COVID-19 pandemic.

Positive Outlook

  • Expect shipbuilding revenue between $7.6 billion and $7.9 billion.
  • Expect shipbuilding operating margin between 5.5% and 6.5%.
  • Expect Technical Solutions revenue between $1.2 billion and $1.25 billion.
  • Expect Technical Solutions operating margin between 2.0% and 2.4%.
  • Expect 2020 free cash flow in excess of $500 million.

Challenges Ahead

  • Assumes San Diego Shipyard closing occurs in Q3 2020, and UPI closing occurs in Q4 2020.
  • Assumes limited relief for costs directly related to our pandemic response but have made no assumption for equitable adjustments for the delay and disruption caused by COVID-19.
  • Guidance assumes an orderly recovery to normalized attendance levels at both shipyards.
  • The full impacts of COVID-19 on our fiscal year 2020 financial results and beyond are uncertain.
  • Continued lower staffing levels and lower employee productivity could impact our ability to achieve anticipated milestones and further affect our 2020 financial results and beyond.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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