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Huntington Ingalls (HII) Beats on Q4 Earnings, Sales Up Y/Y

Zacks

Huntington Ingalls IndustriesHII fourth-quarter 2017 adjusted earnings of $3.11 per share surpassed the Zacks Consensus Estimate of $2.92 by 6.5%. Earnings however declined 26% from $4.20 a year ago.

Excluding one-time items, the company reported GAAP earnings of $1.41, compared with the year-ago figure of $4.20.

Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise


Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise | Huntington Ingalls Industries, Inc. Quote

For 2017, the company’s adjusted earnings of $12.14 per share surpassed the Zacks Consensus Estimate of $12.09 by 0.4%. Earnings were in line with the year-earlier figure.

Total Revenues

Total revenues in the fourth quarter were $2 billion, almost in line with the Zacks Consensus Estimate of $2.01 billion. The top line rose 3.9% from the year-ago $1.92 billion. The upside was driven by sales growth at the Newport News and Technical Solutions divisions.

For 2017, Huntington Ingalls reported revenues of $7.44 billion, compared with the Zacks Consensus Estimate of $7.45 billion. Full-year revenues reflected an annual improvement of 5.3%.

Segment Details

Newport News Shipbuilding: Revenues totaled $1,139 million, up 1.8% year over year on higher revenues in naval nuclear support services and aircraft carriers. Operating income declined 23.7% to $106 million.

Ingalls Shipbuilding: Segment revenues were $638 million, down 0.5% year over year on lower revenues from the Legend-class National Security Cutter (NSC) program and surface combatants. Operating income dropped 11.8% to $75 million.

Technical Solutions: Segment revenues were $242 million, up 30.1% year over year primarily, on higher volume in integrated mission solutions services. This, in turn, was led by the acquisition of Camber in the fourth quarter of 2016. Higher volumes in fleet support also boosted revenues at this segment. Operating income was $8 million, up a whopping 700%.

Backlog

The company received new orders worth $8.1 billion in 2017, as a result of which its total backlog reached $21.4 billion as of Dec 31, 2017.

Financial Update

Cash and cash equivalents as of Dec 31, 2017, were $701 million, down from $720 million as of Dec 31, 2016.

Long-term debt, as of Dec 31, 2017, was $1,279 million compared with the 2016-end level of $1,278 million.

Cash from operating activities in 2017 was $814 million, compared with $822 million at 2016-end.

Zacks Rank

Huntington Ingalls sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Lockheed Martin LMT reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%.

Rockwell Collins COL posted adjusted earnings per share of $1.59 for first-quarter fiscal 2018 (ended Dec 31, 2017), which beat the Zacks Consensus Estimate of $1.53 by 3.9%.

Raytheon RTN reported fourth-quarter 2017 adjusted earnings from continuing operations of $2.03 per share, beating the Zacks Consensus Estimate of $2.02 by 0.5%.

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