Huntington Ingalls (HII) Misses on Q3 Earnings, Rises Y/Y - Analyst Blog

Aerospace and defense operator Huntington Ingalls Industries' (HII) third-quarter 2014 earnings of $1.67 per share lagged the Zacks Consensus Estimate of $1.84 by 9.2%.

Earnings in the reported quarter were much ahead of the year-ago figure of $1.17 by 42.7%. The spike in earnings is primarily due to an increase in revenues and better cost management.

Total Revenue

Total revenues in the third quarter of 2014 were $1,717 million, marginally below the Zacks Consensus Estimate of $1,729 million by 0.7%.

However, total revenues were higher than the year-ago figure of $1,637 million by 4.9%.

Segment Details

Newport News Shipbuilding: Segment revenues in the reported quarter were $1,097 million, up 3.5% year over year. The rise was primarily due to higher sales in submarines and energy and the acquisition of The S.M. Stoller Corp, partly offset by lower revenues in aircraft carriers.

Ingalls Shipbuilding: Segment revenues in the reported quarter were $559 million, down 5.7% year over year. The decline in revenues was primarily due to lower sales in amphibious assault ships, partially offset by higher sales in the National Security Cutter (NSC) program and surface combatants.

Highlights of the Release

In the reported quarter, the company received new orders worth $400 million and exited the quarter with a total backlog of $22.8 billion of which nearly 57.7% was funded backlog.

Total operating expenses in the reported quarter were $1,553 million, up 2.2% year over year.

Operating income in the reported quarter increased 6.3% year over year to $151 million.

Financial Update

Cash & cash equivalents as of Sep 30, 2014, were $769 million, down from $1,043 million as of Dec 31, 2013.

Long-term debt as of Sep 30, 2014, was $1, 650 million, marginally down from $1,700 million at 2013 end.

Cash from/(used in) operating activities in the first nine months 2014 was $314 million as agaainst ($56) million in the year-ago period.

Other Defense Releases

Lockheed Martin Corp. (LMT) reported quarterly earnings of $2.76 per share, comfortably surpassing the Zacks Consensus Estimate of $2.72 by 1.5%.

Northrop Grumman Corp. (NOC) reported third-quarter 2014 adjusted earnings of $2.32 per share, beating the Zacks Consensus Estimate of $2.16 by 7.4%.

General Dynamics Corp. (GD) reported third-quarter 2014 earnings from continuing operations of $2.05 per share, comfortably surpassing the Zacks Consensus Estimate of $1.91 by 7.3%.

Zacks Rank

Huntington Ingalls Industries currently has a Zacks Rank #3 (Hold).