Huntington IngallsHII

The company earned $5.27 per share last quarter, easily beating the $3.79 analysts were looking for. Revenue grew about 11 percent to $3.4 billion, led by strong activity at both its Newport News and Ingalls shipyards. Management was confident enough in the pace of work to raise its 2026 shipbuilding revenue goal to a range between $10.2 billion and $10.4 billion.

This is an encouraging sign that the company is successfully clearing the production bottlenecks that have slowed it down in the past. It also kept its target for free cash flow, the actual cash left over after paying for operations and equipment, steady. For a company with a $54 billion backlog, the ability to turn that work into cash efficiently is the most important thing for long-term owners to watch.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Financial outlook raised: HII increased its full year shipbuilding revenue target to between $10.2 billion and $10.4 billion, which is an increase from the previous top end of $9.9 billion. Management also lifted the bottom end of its expected shipbuilding profit margin to 6.0%, showing confidence that the yards are running more efficiently.
• Shipbuilding volume surges: Revenue at Newport News Shipbuilding jumped 15.3% to $1.8 billion as work on aircraft carriers and submarines picked up speed. At the Ingalls yard, sales grew 16.7% to $845 million because of higher activity on amphibious assault ships, which are large vessels used to transport Marines and their equipment.
• Record backlog growth: The company secured $6.7 billion in new contracts during the quarter, pushing the total backlog of future work to $57.3 billion. This growing pile of orders provides a long cushion of guaranteed business, up from the $54.0 billion reported just three months ago.
• Tech division profit improvement: Revenue in the Mission Technologies division, which handles high tech work like unmanned underwater vehicles, fell 3.9% to $760 million. While sales were down, the division's profit margin improved to 7.2% from 4.6% a year ago because of better performance from joint ventures.
• Temporary cash flow swing: Free cash flow, which is the money left over after paying for operations and new equipment, was negative $150 million this quarter. This is a sharp drop from the $730 million generated a year ago, largely because the company spent $396 million more on contract assets, which is work performed but not yet billed to the government.

Our take: This was an exceptionally strong quarter that showed the company is hitting its stride in the shipyards. By raising the full year sales outlook to at least $10.2 billion and increasing profit targets, management is proving it can handle heavy Navy demand. This results package reinforces our view of HII as a reliable defense cornerstone.