Huntington Ingalls Industries, Inc.’s (NYSE:HII) first-quarter 2018 earnings of $3.48 per share missed the Zacks Consensus Estimate of $4.07 by 14.5%. However, the bottom line improved 36% from $2.56 a year ago.
Total Revenues
Total revenues came in at $1.87 billion, which surpassed the Zacks Consensus Estimate of $2.01 billion by 6.2%. The top line also rose 8.7% from the year-ago $1.72 billion. The upside was driven by higher sales volume at the Newport News and the Ingalls shipbuilding divisions.
Segment Details
Newport News Shipbuilding: Revenues totaled $1,082 million, up 11.4% year over year backed by higher revenues in naval nuclear support services and aircraft carriers. Operating income declined 29.2% to $51 million due to one-time bonus payments in 2018, related to recently enacted federal tax reform. Also, year-to-year variances in contract mix affected the operating income.
Ingalls Shipbuilding: Revenues at this segment came in at $585 million, up 6.4% year over year on higher revenues in amphibious assault ships. Operating income dropped 3% to $64 million due to lower risk retirement on the NSC program.
Technical Solutions: Revenues at this segment were $233 million, up 3.6% year over year driven by higher revenues in oil and gas and fleet support services. Operating income was $2 million compared to an operating loss of $18 million in the year-ago quarter.
Backlog
Huntington Ingalls received new orders worth $2.6 billion in first quarter. As a result, the company’s total backlog reached $22 billion as of Mar 31, 2018.
Financial Update
Cash and cash equivalents as of Mar 31, 2018, were $528 million, down from $701 million as of Dec 31, 2017.
Long-term debt, as of Mar 31, 2018, was $1,280 million compared with the 2017-end level of $1,279 million.
Cash from operating activities, at the end of first-quarter 2018, was $120 million compared with $98 million at the end of 2017’s first quarter.
Zacks Rank
Huntington Ingalls carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Peer Releases
Spirit AeroSystems Holdings (NYSE:SPR) reported first-quarter 2018 earnings of $1.10 per share, which missed the Zacks Consensus Estimate of $1.35 by 18.5%.
L3 Technologies (NYSE:LLL) posted first-quarter 2018 earnings of $2.34 per share from continuing operations, surpassing the Zacks Consensus Estimate of $1.99 by 2.2%.
Embraer SA (NYSE:ERJ) incurred a loss of 13 cents per share in first-quarter 2018, wider than the Zacks Consensus Estimate of a loss of a penny.
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